Mortgage market update with Dave Lewis at Home Services Lending

  • 4 months ago
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Mortgage market update

This was recorded on 4/16/2020 during the COVID-19 pandemic. (So, if you're watching this in 2021 or later, it's probably a relic of the past and you should move on to another video.)

Anyway, Dave Lewis from Home Services Lending, a local mortgage lender in the Des Moines, IA, area shares how the pandemic has affected the mortgage market. This was a very high level subprime mortgage crisis summary.

His first piece of advice is - don't freak out. (This is good advice!)

We talked about: 

Forbearance, what it is, how it works and should you use it?   7:49

Today's mortgage interest rates  1:54

Foreclosures, when you could be at risk and how long it takes   18:10

Credit scores and how lending requirements are getting tighter  14:51

Chase setting a precedent with their 20% down payment minimum   22:49

Various predictions we both had that are based on nothing but hope

How we met at Gigi's Pilates Studio  33:21

Let’s get to it:

Heather Wright  0:00  

Okay, hello, everybody. I am here today with of course my favorite. One of my favorite lenders, not my favorite, but you know, it's like children, you don't have one favorite. They're all your favorites. All of my preferred lenders are my favorite.  Dave just happens to be one of them. So Dave Lewis,

Heather Wright  0:22  

just like I'm one of your favorite realtors,

Dave Lewis  0:24  

Correct. Correct. Yes, exactly. I know how it goes.

Heather Wright  0:27  

Dave from Home Services Lending is here with us today and he is going to tell us everything we need to know, including if we need to freak out or not. So what is going on in the mortgage industry today, Dave?

Dave Lewis  0:43  

Well, to answer your first question, I would say don't freak, last question. Don't freak out.

Heather Wright  0:47  

Okay, that's, that's good. We should preface it with positive.

Dave Lewis  0:51  

Correct. Yeah, so just know that the real estate market was really really good before COVID-19. And anybody who always says I'm gonna wait till spring to buy it. Just going to put that plan on hold until, you know, maybe June or July when this is all over. Okay. Need didn't change to buy a house, just the timing or the opportunity changed. Right. Okay. So I wouldn't freak out the housing market in the best position ever was. This isn't ‘07 or ‘08 because that was caused by the financial in the housing market. This is caused by a virus. Yes.

Heather Wright  1:21  

At least it isn't our fault.

Dave Lewis  1:23  

Correct. This is not our fault this time. Yeah. So we're safe there. Yeah. This is more of a pause than like a heartbreak or to be scared. We have had some people backed out of contracts simply because of this. Sure. And that's a thing. But I wouldn't, you know, once this picks up, and it turns around, whether that's two months or nine months, we don't know. But once it does, don't expect rates to stay artificially low. Don't expect prices to stay artificially low. It's going to get more expensive, not less expensive.

Heather Wright  1:54  

So what are rates out today?

Dave Lewis  1:57  

3.125 on a 30 year fixed

Heather Wright  2:00  

That is cheap money, good deal. And it's been like that because I just refinanced my house and I locked in at 3.125. I mean, if you know, let everybody get to know Heather a little bit better. And I think, I think that was, did rates first go down at the end of February? 

Dave Lewis  2:20  

Yeah, they went down to as low as like 2.75, 2.8. But they were only there for like a day and the market got so flooded, they couldn't handle the volume. And so they artificially moved rates up to offset. And it had COVID-19 and then up all the way to like 4% for the week. Now, they've kind of settled back down as the market kind of digest everything.

Heather Wright  2:39  

Okay, so the,

Heather Wright  2:43  

the Fed lowered the something to zero. And this was not one of the questions that I wrote down to ask, which is why it would appear as though I'm unprepared for it. Good. Yeah. But you remember probably about a month ago when the Fed lowered whatever to 0 to .25% And people were incorrectly thinking that they would get a mortgage for 0% interest. Yes. Can you explain to everybody why that is not true.

Dave Lewis  3:13  

So the feds fund rate is the money at which banks lend to each other on a short term basis, short term money. Like, like, what, days, weeks, months, not 30 year fixed mortgages.

Heather Wright  3:26  

Why would a bank lend money to another bank?

Dave Lewis  3:30  

All sorts of reasons depends on how deep in the weeds you want to get. At the top of the weeds! But just intraday, one bank may have a payoff more than another day and I may need to borrow money, just short term to get some things moved around the balance sheet.

Heather Wright  3:43  

So there's a lot of money moving around at banks that we probably don't really realize, think about or necessarily even care about.

Dave Lewis  3:51  

Correct. Okay.

Heather Wright  3:52  

All right. So, so that rate is just for the cost of money for the bank.

Dave Lewis  3:58  

To lend amongst themselves basically.

Heather Wright  4:01  

Okay, which stimulates the economy? Because if they weren't lending amongst themselves, then you know, it'd be like the kid who can't share on the playground. And nobody wins from that. Yep. Is that what you teach your daughter?

Dave Lewis  4:16  

Hold on your screen got moved, and I'm not very good at this. I'm trying to fix it.

Heather Wright  4:20  

Welcome to another episode of technology. Does it work ever. At Dave lewis

Dave Lewis  4:26  

is not great at technology. That's okay. I'm just trying to pull it back up and I don't remember where it's at.

Heather Wright  4:34  

Are you looking for zoom?

Heather Wright  4:36  

Yeah. It's a little blue. 

Dave Lewis  4:39  

I found it alright. Sorry. So yes, banks have to lend amongst themselves constantly in order to stay afloat and to meet certain criteria that the government requires them.

Dave Lewis  4:48  

Okay.

Heather Wright  4:49  

So. So how come that rate is not available for us for mortgages?

Dave Lewis  4:55  

So mortgages are a completely separate rate that's traded separately. Depending on what kind of loan you're doing, they're traded independently. And so you have to think about it from this perspective. An investor is actually fronting that money you're using, okay, they need to get paid something. Otherwise, why would they loan money. Right?

Heather Wright  5:15  

Free in real estate?

Dave Lewis  5:16  

No. Or in life? Really? Yeah. And then there's a servicer involved. So when you're actually making your payments, do they have to make a margin to do their job. Right? And then the people like me and you on the street, have to get paid something to then offer that to the general public. So there's layers of people that have to get paid, there's no way to be zero otherwise, we'd all be working for free. Yeah, that's not gonna happen. And that was the point I'd rather stay home.

Heather Wright  5:41  

Right. I'm sure that people want us to work for free. But also, what have you worked for free? Like that's

Dave Lewis  5:48  

gonna work for anybody who's asking you to work for free.

Heather Wright  5:51  

Right? Amen. Amen. Okay, so there have been some changes with getting loans. I talked about this a couple of weeks ago, like I and I remember just enough to be able to ask the leading question. Okay. So FHA, for example, and did you say that all government backed loans? Okay, so tell us about those if you are, like, who does this effect? And what is the effect?

Dave Lewis  6:23  

Okay, so we'll try to go with like a super high level because it gets super complicated. So when Trump told everyone that you could forbear payments, that means you don't have to make the payment to the servicer, right? Sounds like a good idea. But the servicer still has to pay the end investor their money.

Dave Lewis  6:40  

With me so far?

Heather Wright  6:42  

Well, forbearance was my question later on. So now I don't understand what you're talking about forbearance.

Dave Lewis  6:48  

Well, you're asking why all the credit policies changed.

Heather Wright  6:51  

Okay, well, let's start with forbearance. What is forbearance?

Dave Lewis  6:54  

Okay, so, historically, forbearance on a mortgage means you don't make your payments for one to four months. Okay. Into that period, you owe all those payments.

Heather Wright  7:04  

So I saw a post last night and I said, Tell me how this works because I thought it worked that

Heather Wright  7:11  

if Okay, so let's say, let's say we lost our job, I lost my job and I can't make my mortgage payment this month. Well, obviously I don't want to go into foreclosure right. So instead of starting the foreclosure process, I call the mortgage company and say, hey, I lost my job. It is Coronavirus related. I'm not sure. I mean, does forbearance have to be Coronavirus related?

Dave Lewis  7:35  

In general life? No.

Heather Wright  7:36  

Okay. So I lost my job. I need some help. I really want to pay my mortgage. You know, I've done a really good job of paying my mortgage for however many years. What can we do to help me get past this bad time? Right. And so then I thought a forbearance was, let's say, they said, Oh, no problem. How long do you think it would take you to get a new job? Four months, I mean, that might seem like a long time, it might not seem like a very long time at all. But for the sake of this example, we'll say four months. Right. So then they say no problem. And previously, I thought that was tacked on the very end of your loan. So in 25 years, I would have four months of extra payments. I read a post last night, that it was actually at the end of the four months. Correct. Not only was the four months I just skipped my payment due plus, plus the month that was due in four months. So in four months, I would owe five months of mortgage payment. Who can do that?

Dave Lewis  8:41  

Especially if you haven't been working? Yeah, that's the problem. So what you're thinking of is payment deferment.

Heather Wright  8:48  

Oh, okay.

Dave Lewis  8:49  

Versus forbearance. So deferment is very common in student loans and car loans. Yep. But mortgage loans are not treated the same. They're not structured the same. They're not packaged the same. So there is no such thing as a deferment necessarily in a mortgage. Okay. Just a forbearance or no pay, essentially are your two options. And so when Trump comes out and says that Trump administration in general says you can go into

Heather Wright  9:16  

non Trump, this is not a political Yeah,

Dave Lewis  9:18  

no, I just said Trump because he's about to set up, but it's the whole thing. Okay. Hey, you don't have to make your payments. Everyone assumed it was deferment and started signing up for it. And it's not it's forbearance. And we know that if you skip payments for four months, and you don't have a job for four months, you're not going to pay five payments. Yeah, four months. And so what would happen in that case, and this is still a little bit out there because if we don't know for sure, they can't report you late during that period. But at the end, if you can't pay all of it, they could just foreclose on your property, because you're more than four months delinquent. Wow. Okay. So that's the scary part. Because that's how it's intended to be used. For that term forbearance. At the

Heather Wright  10:01  

beginning of this call, you said don't freak out. So

Dave Lewis  10:05  

you know it most servicers realize they don't want to have a bunch of foreclosures hit their books in four months. That's not ideal. Every loan servicer has a different idea of how they're going to handle it. Okay. Because

Heather Wright  10:20  

the government's given them zero guidance. So by loan servicer, you mean like Home Services? Well, like Wells Fargo, US bank?

Dave Lewis  10:28  

Sure. Inti,

Dave Lewis  10:30  

Penny Mack. Anybody, Mr. Cooper, anybody you physically make your payment to her. Okay, Mr. Cooper. Yes, those people. So if you're thinking about a forbearance, call them and ask them what their terms are. Okay. And their terms might change. The government right now, they're hoping they come out and give some sort of backstop or help to these guys.

Heather Wright  10:47  

Sure. I mean, they almost have to with as many people who have filed unemployment in the last couple of weeks, and everybody who's selfish, I mean, whoa. Yep. I'm glad you said we shouldn't be freaking out because like after that sentence, I kind of want to.

Dave Lewis  11:02  

So that's the question right now the big question is, right now the government hasn't stepped in and said they're going to help these servicers. So again, if you don't make your payment, but they still got to make the payments to taxes and insurance, now they're fronting you money for how long, for when, we don't know, the government shutdown gonna help them out.

Heather Wright  11:20  

And they're big employers. So that's it's just it's, it's a bad cycle where you have tons of people already losing their job, those people not paying their mortgage, whether or not they can, and then all of a sudden the banks that employ, I mean, how many people do you know that work at Wells Fargo locally? Right. And yeah, wow. Oh,

Dave Lewis  11:40  

so there's two problems. One, they didn't say people had to prove they were affected by COVID. Okay, and just call Hey, I want forbearance. No problem, because some people will do that and not understand why. Sure. And two, they didn't help them with a backstop saying, okay. 20% of your book doesn't make payments on time. Are you running a 50% margin? No. So if 20% of your business stops paying, you're not you're losing money now. And so how do they overcome that over the foreseeable future?

Heather Wright  12:07  

I mean, realistically, we're probably going to be looking at some bank bailouts, right, like we did in 2008. I mean, how could they not the so right now stimulous

Dave Lewis  12:17  

Yep. So there. So now that we a little deeper here, but there's banks, and then there's like, secondary market. So the problem isn't the banks right now, the problem is the secondary market, who are not tied to a bank or the broker, or correspondent which we are which what most people are.

Heather Wright  12:35  

Well, you lost me, Dave. I know. Okay, so my mortgage used to be with Wells Fargo, I just refinanced, and I don't remember who it's with now. So I made my payment every month to Wells Fargo, and they are a bank. Are you saying that it's not because it's a separate division or?

Dave Lewis  12:52  

There's just two legs, I guess. I don't know. I'm trying to think of how I would describe this and make it make sense. Banks just have their own products. They're one bank, they have one product, they own everything. Right?

Dave Lewis  13:05  

Okay, well, yeah.

Dave Lewis  13:06  

Yeah, we have 22 investors, one of those investors is Wells Fargo with other people as well. So how would your business is different? Okay. Okay. And so what this is affecting is the people that have multiple investors. Because when we close alone, we put it on our money. And then we wait for the bank to say, Yep, I agree and take it from us. But there's a lag there, but 30 days, 40 days. Okay. So getting back to simple. So you asked why, so some of these investors for FHA, VA, USDA, right. There's this 30 day gap, if you lose your job during that 30 days, who's stuck holding the loan?

Dave Lewis  13:47  

Dave? Correct. Oh, no.

Dave Lewis  13:51  

Right. So what do we do to mitigate risk? Raise the minimum standards to people who will be less likely to lose their jobs.

Heather Wright  13:59  

Now is that per company like Home Services Lending has different standards than Joe's loans down the street?

Dave Lewis  14:06  

It is per company. Yep. But you know, meeting with 20 of my counterparts in our market that we meet bi weekly, we're all very similar. This isn't a Home Services thing or a Fairway thing or a Gershman thing or a name another company. I know

Heather Wright  14:22  

you're telling us all your friends

Dave Lewis  14:24  

I know, right?

Dave Lewis  14:26  

It's, it's just kind of not we will take it a little bit different stances in different areas. Some of us a little higher here, a little better there. But across the industry, it's changed. Just trying to mitigate risk. Now, here's why I said in the beginning, don't worry, right. This isn't permanent, right? temporary through this. People get back to work and get a little more information from the government that says, here's how we're going to help you. And all of a sudden, this loosens back up again. Right. It's just kind of a knee jerk reaction.

Heather Wright  14:51  

So for the person who might not be able to buy a house as quickly as they had initially planned, because these new changes affect them. Like, what? For example, what are the I mean, because the credit score floor increased, right? So you could have like a 560.

Dave Lewis  15:15  

Well, 580 with minimum down. Okay. And some lenders have done to 620 to 640, some to 660. But most people have raised their floor.

Heather Wright  15:24  

And that's because I mean, if you have a credit score under 600, well, there's probably some bills that weren't paid on time. And

Dave Lewis  15:32  

you don't have the best track record of telling us you're going to make your payments even if you can.

Heather Wright  15:36  

Right, and there's nothing wrong with that. We're not shaming anybody for not paying your bills, although we should all pay our bills on time. Right. But you know, life happens. But also life is happening right now. So you're going to delay your plans a little bit.

Dave Lewis  15:51  

Yep. You got to make decisions on how a business is going to function moving forward, so you're not stuck holding the bag on a deal that you can't get rid of.

Heather Wright  15:59  

How quickly can I raise my credit score 100 points? If I was at 560?

Dave Lewis  16:05  

that'd be tough to go from like a 600 with a 640 or something like that, huh? Two to three months. Okay, as long as you're diligent depends on what's on there. Okay. And we work with credit repair companies that help people with that, or we can kind of help guide you through okay, if you did this, this and this, it should get you to this. Okay.

Heather Wright  16:25  

Okay. It's not really a speedy process.

Dave Lewis  16:28  

No, credit bureaus are usually about 30 days behind. So the information I'm seeing let's say in April is actually the information that was reported in March. Okay. So if you make a decision today to pay off, pay down a credit card, it's not going to report till the end of the month and so I might see it next month or I might see it until June. Got it. Yep.

Heather Wright  16:51  

So credit scores have increased, what else?

Dave Lewis  16:55  

Um, that's really it. I mean, a lot of like downpayment assistant programs are not being accepted right now. Like Iowa Finance Authority downpayment assistant will help you with your down payment.

Heather Wright  17:07  

So I just had one close recently with IFA. Did they finish out the ones that were in the hopper, and then they're not taking new applications.

Dave Lewis  17:16  

So the issue is the IFA with basically what they've said is okay, I closed it today, and you're still employed. But back to my point, if I can't get it to IFA, let's say for it, we actually we just had a call earlier today in another state where we closed it, the person was employed. A week later, we gave the package to the bond authority or the state and the person lost their job. Well, now we're stuck with that loan at basically 100% financing because it was a downpayment assistance program. And we can't do forbearance because we're not guaranteed by the government because we're not let's get too far into the weeds but so now we don't have any option with the foreclose on the people unless they make payments.

Heather Wright  17:59  

Okay. So this was not on my list of questions to ask. Don't ask it. What do you think it is? Ask away.

Dave Lewis  18:06  

I'm just saying, we got what we got. We got way off to the side here. I'm okay.

Heather Wright  18:10  

But I like that I think these are the best conversations. And even if nobody else is interested in this, I mean, I'm learning things from you. So our time for sure. So I thought it took like 18 months approximately to foreclose on a property. But you said if it's like that forbearance if you had four months forbearance and you don't pay it in the fifth month, then they could foreclose on you.

Dave Lewis  18:34  

It's to start the foreclosure process is four months of no payments.

Heather Wright  18:38  

Oh, so four is the magic number.

Dave Lewis  18:41  

Correct. Now they can negotiate with you, they can do whatever they want to do at that point. But if in four months, you haven't made payments, and you have no plans of making payments, they can start the foreclosure process. How the process can take two months, six months a year. Okay. Back in ‘07 and ‘08 when it was all just

Dave Lewis  19:01  

Crap show.

Heather Wright  19:03  

You can say it. I censor myself.

Dave Lewis  19:05  

It was taking them, yes, 12 months up to 18 months to get it completed, but the actual foreclosure parts four months delinquent.

Heather Wright  19:15  

Oh geez. Okay.

Heather Wright  19:19  

So is it a good idea to not pay your mortgage Dave? Never. I think that is the moral of the story here. We should all walk away from this.

Dave Lewis  19:26  

Knowing that you should always pay your mortgage. If you can make your mortgage payment, make it, if you can't then call the servicer and figure out what options you have and figure out if their forbearance process allows you to pay it back later. If they're going to make it like a second mortgage down the road. what they're going to do with that money you skip don't just assume it goes away.

Heather Wright  19:49  

Okay, yeah, that's um, it'll be really interesting in four or five months to see who the bad guys are. Yeah,

Dave Lewis  19:57  

and here's and I talked about this on a video I shot on Facebook. The same is true with rent. Not that, okay? I'm a landlord. But if you choose not to pay your landlord, because you can't make your payments during COVID-19, the state of Iowa says I can't evict you. But at the end of your lease, you still owe those rental payments. Yeah, so all I have to do is file small claims court for 50 bucks and put a lien against you. So again, if you can make payments, make them.

Heather Wright  20:24  

And so let's say you didn't pay your rent for four months to Dave. Heather sold her rental property, thank goodness, I didn't have to deal with this right now. I do not have the strength it takes to be a landlord in normal circumstances.

Dave Lewis  20:40  

Some days I don't either.

Heather Wright  20:42  

So let's say somebody, maybe it's legit, they can't pay their rent. And so then their lease is up in October, they move out. They still haven't paid you. You go to small claims and you file for let's say $4,000 is what the rent was they owed you. And now that's a lien applied to them. Well, let's say a year or two goes by, they've saved up some money, now, they totally forgot about that issue. Because I mean, who doesn't want to forget about bad times that they've lived in? Right? Right. So then they go, and they decide that they want to purchase a house. So they apply for a mortgage. They have a realtor, hopefully not me. I don't want to have to be the person who's like, well, you owe Dave money and he's my friend. So, but they go to buy a house right now. Is this money that they have to pay when they buy a house or when they sell a house?

Dave Lewis  21:42  

So it depends on who they're dealing with. I don't report to credit bureaus. So for me, it's multifaceted. If it's me, then no they wouldn't they bought a house. We don't do buyer searches in Iowa. So they could buy a house, get into a house, never know anything about it,

Heather Wright  21:58  

but if they hire 30 Don't they?

Dave Lewis  22:00  

Some do. Well, yeah, and that's another point. Some do. We don't, okay? Most correspondent lenders don't. So when they would go to refinance it or sell it, that's when we catch up to them, and they don't have to pay it. Aha. Now some lenders, usually more local lenders that are smaller do buyer searches, which means at the time of purchase, it would come up and you'd have to pay it at that time on top of your down payment. So you would either have to pay

Heather Wright  22:25  

it or not buy the house. Correct. Because maybe you still don't have that $4,000 on top of everything else you need to buy a house right now. I wonder if that gets you out of the contract?

Dave Lewis  22:36  

Yeah, because you're you're you wouldn't have the assets needed. Financing contingency, so you would get out? Yeah.

Heather Wright  22:42  

Okay. Let's not talk about that.

Heather Wright  22:49  

Okay, so, in the last week Chase,

Heather Wright  22:54  

announced that they are, what was their announcement that they're only doing 20% down conventional loans. Now they still have, like the low income. And what do they call it? Chase dream or something like that?

Dave Lewis  23:08  

Yeah. So only through their in house lenders. But yeah.

Heather Wright  23:12  

So for the majority of loans that Chase Bank does, which in 10 years of selling real estate and what 700 to 800 houses I've never once worked with Chase. Thank goodness, I've heard bad things that it's really difficult to work with them. If someone from Chase is watching this, I apologize that this is news to you. But, um, you know, I feel like that could be the beginning of a trend. What do you think?

Dave Lewis  23:36  

So I again, I sat on a call earlier today, Chase, first of all, is that the largest mortgage investor in the United States?

Heather Wright  23:46  

No wonder they're difficult.

Dave Lewis  23:48  

Yes. And they have some of the most warehouse lines so warehouse lines is what we use to fund loans and then get rid of them later, like an interim for us. Okay. Think of like a home equity loan right. You go fix up the house and you pay it off later. Okay. So what I heard today, which was new to me, which made more sense than I thought is they are trying to prove to the government that this is a real problem, and they need to step in and do something. So as the largest lender, they're basically setting the example. If you guys don't do something, this is what the mortgage markets gonna look like moving forward. That makes sense. And I hadn't thought about before until I heard that this morning. They're basically just saying, Look, guys, if you're not going to come in and backstop this and help us you've helped everybody else but not us, then.

Heather Wright  24:36  

They're the bully leader on the playground that is going to teach your child to not share with the teachers.

Dave Lewis  24:44  

Yeah, so that's the reason at least that's a theory anyways, right? And it makes some sense.

Heather Wright  24:49  

Yeah. Yeah.

Dave Lewis  24:50  

I mean, guys, you have to understand what this looks like. If you don't help us out. Maybe you haven't got the message. So here's the message.

Heather Wright  24:58  

What else was on that call of yours? It sounds like it was really interesting.

Dave Lewis  25:02  

A lot of it I can't share, but

Heather Wright  25:04  

I know, secrets. I hate

Dave Lewis  25:06  

secrets. Just company. It's a company call.

Heather Wright  25:09  

Oh, I see. Okay. Yeah. Um, well, what else haven't we talked about that we should talk about?

Dave Lewis  25:17  

I don't know. I think that's what those are the notes that I had basically, again, this choppy time, whether it's two months or six, we don't know. But before it happened, it was good. And after it happens, it should be good.

Heather Wright  25:30  

Right. And, and there's a lot of graphs and charts and, you know, numbers that are done by people who are much smarter than I am in that arena, that show how like your, your house prices should not be very affected or negatively affected. Right. Should be they are saying they shouldn't be. I mean, they are never around when they're wrong, you know, right. So um, What we have seen though, and actually this is a real good question. I would like to know what you have seen recently because what we have seen recently is that prices are holding. That people are still buying people, people are still inquiring on things. For the first, what week are we on? Like week four or five now?

Dave Lewis  26:23  

of this thing? Yeah. Four

Heather Wright  26:26  

of our new life or new life.

Heather Wright  26:31  

Yeah, so for the first couple of weeks of whatever week we're in, yeah, we were definitely like it was almost like business as usual because the people who were already in the market stayed in the market. This is my personal experience not I'm not speaking on behalf of the world. They don't let me speak on behalf of the world. Why? I don't know, I often ask myself the same question. And so people who were in the market stayed in the market, and we didn't get a lot of new inquiries. So, you know, usually we get several people a week saying, hey, I want to buy a house, I want to sell a house. And you know, what you do today is what you get paid on in 90 days. Right. And so, in the last week or so, we have seen a few more inquiries coming in, which applies to my theory, which is not based on numbers, charts or actual facts. But when I am out, driving, social distancing in my car, don't judge, traffic has picked back up. It's almost normal out. So and like on the interstate, it seems like it's pretty normal level. And so I told my husband last week, I'm pretty sure Iowans are over it, you know, you know, maybe that also supports the inquiries coming in last week. What has it been like for you over the last month?

Dave Lewis  27:58  

So I will say a couple of things on that. Number one, Iowa 

Dave Lewis  28:05  

sets itself apart from the rest of the United States. And most of those reports you read are national. And so even back in, ‘07 and ’08 when there was a housing crash, places like Las Vegas and Arizona and New York in California, so 20, 30, 40% loss of values, we were like flat or like minus 2% 3% in some spots. Now, if you were above a million dollars, it was bad. But the average house price of 2 to 300,000, then at least that much of a hit. Right. So I think the same is going to be true here in Iowa. I don't want to speak from New York City or New Jersey or some of those places where, yeah, so we read those national stories. That's where they're coming from. They're not coming from Des Moines, Iowa. So to your point, I definitely think we kind of have a pause. And I definitely think 90 days from now we'll see that pause in our business. Yep. But what I found interesting is last week, year over year, applications for purchase mortgages from last year to this year, we're down 35%.

Heather Wright  29:03  

Okay, you say applications were down. Mortgage applications

Dave Lewis  29:06  

for purchases are down 35%. But think about this, nearly 20% of Americans right now are unemployed. Yeah. And another half of Americans shelter in place. You can't even what are you gonna do? And so to only be down 35% is actually pretty crazy.

Heather Wright  29:25  

Yeah, that's actually

Dave Lewis  29:26  

If you remember last year, the market was pretty good. Right. It was better than the year before that. So that's why I'm saying when I started this call, don't freak out. I mean, yes, it's slowed down in short term. And I think you're right. I think I'm over it. I mean, I've been at home working from home for almost a month now and really, so

Heather Wright  29:45  

Poor Dave in his basement office.

Dave Lewis  29:47  

Well,

Dave Lewis  29:49  

my office is now my daughter's room. And so I got to move, but um, so I think that we come out of this pretty good in Iowa and I will again, I can't speak for the parts of the world but I think we come out of this pretty good. Give it another two weeks or 30 days, and I think it's gonna be going.

Heather Wright  30:05  

Well, let's all hear it for Dave, because that is a very positive premonition, I think.

Dave Lewis  30:13  

Well,

Dave Lewis  30:14  

again, I, you know, I think we listened to media, they're talking about how it might be another 60 or 90 days. But, again, we have as many COVID cases in the state of Iowa as New York has in a city block. Like it's just not so to apply us to the world is not fair. Right. I just don't see it taking as long here to get back up to normal. I could be wrong.

Heather Wright  30:34  

Well, and then for the people who say that, Oh, well, it's because we're so good social distancing and staying at home. I don't think that's true. I'm out on the streets and I say all the people out there and there was a report about cell phone usage that showed that Iowa was one of the worst states and not be worse, but it was like in a category of the darkest color worst. Where our phones told the truth how we're not staying home.

Dave Lewis  31:01  

So what I find funny those three months I grew up in DeSoto. Okay, you grew up in Guthrie Center. Yep. I had a buddy of mine grew up in Creston. Okay. He never in his entire life until he was an adult left the state of Iowa. Oh. And I can think of maybe two or three times to tell us in my teenage years that I left the state of Iowa.

Heather Wright  31:21  

Yeah, I mean, we had family vacations to Missouri, South Dakota. I didn't go on a plane until I was

Dave Lewis  31:29  

going to China or New York City or California.

Heather Wright  31:32  

Yeah. I mean, Dave, I don't think I'll ever go to China. But

Heather Wright  31:37  

I guess you know, this, but I don't fit in like I'm

Heather Wright  31:41  

Godzilla over there. And I don't care for that. So,

Dave Lewis  31:44  

but I guess my point is, it's like look at the states that have the least COVID like North Dakota, South Dakota, Nebraska, Iowa. I mean, yes, Illinois has it but that's because the Chicago's there. Sure. You look at these rural states or, you know, a lot of these small towns, don't go very far.

Dave Lewis  32:00  

That's true. That's true. And I just don't. I mean, that's just my theory. But I mean,

Heather Wright  32:06  

I know, well, who knew that we were going to be so, you know, intelligent on our theory is based on nothing but facts and facts on

Dave Lewis  32:14  

life. I mean, based on nothing, including facts. But you take out that chicken plant in Sioux City or Sioux Falls Sioux City. Yeah. And then you take out basically like the retirement homes that got affected and like Linn county and Cedar Rapids. Yeah. And that's like most of the cases in Iowa is that most of them, but it's a lot of them. So I don't know. I see getting back to normal sooner than later.

Heather Wright  32:37  

Let's all cross our fingers that we are back to normal in the two weeks that Dave Lewis from Home Services Lending. Wow.

Dave Lewis  32:46  

That's not a fact. That is.

Heather Wright  32:49  

That is once again, Heather speaking on behalf of the world, which is exactly why they don't let me do that. Love it, love it.

Heather Wright  32:56  

all right. Well, Dave, if you

Heather Wright  33:00  

Tell me about the type of person that you would love to call you this afternoon to apply for a loan.

Dave Lewis  33:07  

Everyone.

Heather Wright  33:09  

Even the people who might have a 500 credit score? Yeah.

Dave Lewis  33:12  

If you ever want to buy a house, you gotta start. It's like losing weight. You got to start some point. At some point, you got to start exercising cutting calories.

Heather Wright  33:21  

Fun fact, Dave and I met at Gigi’s Pilates Studio, where we did TRX workouts together. Like Yeah, some weird weird stuff in our background, and I

Dave Lewis  33:35  

10 years ago,

Heather Wright  33:36  

for years, I thought his name was Lewis.

Dave Lewis  33:41  

Most people call me they know me. Yeah, yeah. But no, we got to start some point. So

Dave Lewis  33:46  

don't go out on your own. Don't try to Google it. You're not gonna get the answers you want. Just call me and pick five minutes and let's walk through it. Okay,

Heather Wright  33:53  

well, guys, you heard it here. Dave wants to talk to everybody. Because you have to start somewhere when it comes to buying a house. So I think that's fantastic advice. And I appreciate the inclusion.

Dave Lewis  34:06  

Thank you, Heather.

Heather Wright  34:08  

All right, Dave, thanks so much for being here. I will drop a link to if people want to call you like how, how would they reach out to you? Do you want me to link like your Facebook business page? Dave is so high tech.

Dave Lewis  34:22  

Or my phone number is 515-321-5913

Heather Wright  34:27  

Oh, my God, hold on a second.

Dave Lewis  34:28  

That's my cell. Call Dave for a mortgage. 515-321-5913

Heather Wright  34:39  

Okay, awesome. Well, Dave, thanks so much for being here with us. I promised you we would not go over our original time even though we started late. Thank you for being flexible. And yeah, so do you guys have any questions for me? Well, you probably know how to get hold of me. Otherwise, send me a message through Facebook. And if you need to get hold of Dave, give him a call or text.

Heather Wright  35:04  

All right, thanks a lot, Dave. Have a great rest of your day.

Dave Lewis  35:06  

You too, see ya

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