The Mortgage Porter

Mortgage Interest Rates for Bonney Lake, Bainbridge Island, Bellevue and Beyond

Scheduled ecomonic data to be released this week which may impact mortgage rates (mortgage backed securites/bonds):

• Wednesday, February 10: Balance of Trade and Ben Bernanke will be testifying before the House Financial Services Committee.
• Thursday, February 11: Retail Sales and initial Jobless Claims
• Friday, February 12:  Consumer Sentiment
• Monday, February 15:  President's Day (Holiday).  Mortgage Master will be closed.

Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties). The conforming rate quote below is based on owner occupied with a mid-low credit score of 740 or higher, "full doc" purchase with a sales price of $500,000 and a loan amount of $400,000 single family dwelling (non condo). This scenario includes reserves (taxes & insurance) not being waived. Rates quoted are priced based on a 30-40 day closing with no prepayment penalties on any of the rates quoted below.

30 Year Fixed w/0.75 Point*: 4.750% (APR 4.84%).

15 Year Fixed w/1 Pt: 4.125% (APR 4.388%).

10/1 ARM 5/2/5 CAPS w/1 Pt: 4.250% (APR 5.656%).

7/1 ARM 5/2/5 CAPS w/1 Pt: 3.625% (APR 5.849%).

5/1 ARM 5/2/5 CAPS with 1 Point: 3.250% (APR 6.136%).

Conforming High Balance Rates. Pricing is based on the same criteria above except where the loan amount is $417,001 - $567,500 for properties in King, Snohomish or Pierce Counties; specifically priced for a sales price of $625,000 and a $500,000 loan amount. 

30 Year Fixed @ 0.75 Pt: 4.875% (APR 5.002%).

Jumbo/Non-Conforming. Loan amounts up to 1 million for ARMs and 1.5 million for the 30 year fixed. The quotes below are based on 740 or higher credit scores with 80% loan to value with a loan amount of $650,000.

30 Year Fixed at 1 point: 5.625% (APR 5.924%).

7/1 ARM 5/2/5 CAPS @ 1 Pt: 4.875% (APR 6.425%).

5/1 ARM 5/2/5 CAPS @ 1 Pt: 4.500% (APR 6.605%).

FHA. Pricing based on credit score of 660 or better and loan amounts up to $417,000 for FHA in King, Snohomish and Pierce Counties.  (Mid-credit scores 620-659 has a 0.25% hit to pricing). 

30 Year Fixed @ 1 Pt: 4.875% (APR 5.515%).

FHA-Jumbo/High Balance. Pricing based on loan amounts from $417,001 - $567,500 for King, Snohomish and Pierce Counties with a 660 or higher mid-credit score. 

30 Year Fixed @ 1 Pt: 4.875% (APR 5.461%).

VA. Pricing based on credit scores of 620 or better based on loan amounts up to $417,000. VA loan amounts over $417,000 are also available.

30 Year Fixed w/1 Pt: 4.875% (APR 5.185%).

USDA Rural Housing. 100% financing with income limits and properties must be located within a specific area (this program is generally available in rural towns with populations of 10,000 or less). For eligibility, click here.  Priced with 60 day lock.

30 Year Fixed w/1 Pt: 5.000% (APR 5.312%).

Prime Rate (what HELOCs are based on): 3.25%

This is just a small sample available of rates and products. This is not a guarantee nor is it a commitment of interest rate.  *For purposes of this post: "1 point" is 1% of the loan amount and would be reflected in line 801 or 808 (depending on whether the loan is brokered or not) Page 2, Section A of the new Good Faith Estiamte. Unless the rate is bought down; there are zero discount points referenced which would be reflected on line 802 of the HUD-1 Settlement Statement  Section A, Page 2 (Your Adjusted Originaton Charges) of HUD's new Good Faith Estiamte.   

Rates are as of February 8, 2010 at 1:00 p.m. and may change at any time. Available programs may change at anytime as well.  To see rates that I'm quoting "live" click here.

Seattle's Neighbor Appreciation Day is Saturday, February 6, 2010

Seattle's 16th annual Neighbor Appreciation Day takes place tomorrow and many neighborhoods and community organizations have special events planned.   Lower Queen Anne is having a clean up and Ballard is having a Daddy Daughter Dinner just to name a few.  There are a couple events planned in my neighborhood of West Seattle:

Raise the Beds at C&P Coffee California Avenue at 10 am with CoolMom.

Alki Community Center is holding an open house from 11 - 2 pm.   Come meet some instructors, learn about exciting new classes and programs, enjoy refreshments and snacks, make your own valentines, and chat with neighbors. A kids activity table will be full of things for kids to do and create.

Hiawatha Community Center is also having an open house from 12:00 - 2:00 pm.

How is your Seattle neighborhood celebrating?   Visit the City of Seattle's site or your neighborhood center and see!

My Loan Officer Won't Provide Me a Good Faith Estimate

I'm hearing from many consumers that they are having a challenging time obtaining a good faith estimate from mortgage originators.  Once borrowers receive the GFE, they're often surprised to learn that it doesn't contain basic information that they need for planning their home purchase or refinance such as the total monthly mortgage payment or total funds needed for closing.  Regardless, if a borrower has provided the "six points of information" as defined by HUD or has completed a loan application, the mortgage originator must provide the good faith estimate in three business days or deny the loan.

Why the hesitation?  HUD has stated that if a mortgage originator provides a good faith estimate without the "6 points of information" then it is presumed that the mortgage originator has the information and they cannot use receiving this information as a "changed circumstance".  HUD's Vicki Bott had a power-point presentation that stated this (it appears to have been removed from their website).    From HUD's "RESPA in Plain English" slide 28:

"If a GFE is given during pre-qualification, the receipt of one of the six required pieces of documentation will not constitute a  "changed circumstance".

Issuing a good faith estimate not only creates liabilities for the mortgage originator, it triggers several compliance issues and a bevvy of documentation.  There is nothing simple or easy about this document which was intended to be used to provide borrowers a tool for a more "meaningful" rate quote.   These issues are just some of the reasons why mortgage loan originators have shied away from providing this document not to mention the GFE is cumbersome to complete and includes costs that most buyers in Washington State do not pay (such as the owners title police and excise transfer tax).

HUD is keen on this reluctance and issued 57 pages of revised RESPA FAQs late last week with many new points addressing this.   Here are some of the new points from the FAQs updated on January 28, 2010:

• If a good faith estimate is issued while the rate is floating, once the rate is locked a new GFE must be issued updating the important dates within 3 days.  (See FAQ 19 on page 8)
• A loan originator may not require a borrower to sign consents ot verify income, employment or deposits as a condition of issuing a GFE.  (FAQ 31 on page 10)  
• A loan originator may not require "an applicant, as a condition for providing a GFE, to submit supplemental documentation to verify the information provided by the applicant on the application".  I interpret this to mean income and asset supporting documentation.  (FAQ 33 page 11)

If a borrower provides me with income that has been not calculated the way an underwriter would view it, perhaps they're factoring in a bonus they have not been receiving for a full two years, for example, there is going to be a discrepancy between what the borrower perceives as their income and what we do.  The same may hold true for how the borrower views their amount of assets.  This is especially true in our current mortgage climate where guidelines continue to tighten on every level.

It's my understanding that once we receive supporting documentation, if it does not match what was provided by the borrower, it constitutes a changed circumstance (meaning we can issue a revised GFE modifying the points the changed circumstance impacts).  If there is a qualified changed circumstance (paystubs don't match the income that was verbally provided, for example) the loan officer must reissue a new GFE within three days if terms have changed from that specific changed circumstance.

If you're a mortgage originator reading this, please do not rely on any of my articles as a substitute of your own compliance departments.  Check with your employers and legal staff...this is just my two cents.

So if you're really wanting a good faith estimate from your mortgage originator and you've completed a loan application (or provided the information that defines one per HUD), let your mortgage professional know that they need to provide you one or "decline" your loan application.

If you are buying or refinancing a home in Washington State, I'm happy to provide you with a Good Faith Estimate.

Mortgage Rates for the Greater Seattle Area

Scheduled ecomonic data to be released this week which may impact mortgage rates (mortgage backed securites/bonds):

• Monday, February 1: Personal Consumption Expenditures, Personal Income, Personal Spending and ISM Index.
• Tuesday, February 2:  Pending Home Sales
• Wednesday, February 3: ADP National Employment Report, ISM Services Index and Crude Inventories
• Thursday, February 4: Productivity and initial Jobless Claims
• Friday, February 5:  The Jobs Report

Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties). The conforming rate quote below is based on owner occupied with a mid-low credit score of 740 or higher, "full doc" purchase with a sales price of $500,000 and a loan amount of $400,000 single family dwelling (non condo). This scenario includes reserves (taxes & insurance) not being waived. Rates quoted are priced based on a 30-40 day closing with no prepayment penalties on any of the rates quoted below.

30 Year Fixed w/1 Point*: 4.750% (APR 4.094%).

15 Year Fixed w/0.5 Pt: 4.250% (APR 4.511%).

10/1 ARM 5/2/5 CAPS w/1 Pt: 4.250% (APR 5.656%).

7/1 ARM 5/2/5 CAPS w/1 Pt: 3.875% (APR 5.959%).

5/1 ARM 5/2/5 CAPS with 1 Point: 3.375% (APR 6.205%).

Conforming High Balance Rates. Pricing is based on the same criteria above except where the loan amount is $417,001 - $567,500 for properties in King, Snohomish or Pierce Counties; specifically priced for a sales price of $625,000 and a $500,000 loan amount. 

30 Year Fixed @ 1 Pt: 4.875% (APR 5.021%).

Jumbo/Non-Conforming. Loan amounts up to 1 million for ARMs and 1.5 million for the 30 year fixed. The quotes below are based on 740 or higher credit scores with 80% loan to value with a loan amount of $650,000.

30 Year Fixed at 1 point: 5.625% (APR 5.924%).

7/1 ARM 5/2/5 CAPS @ 1 Pt: 4.875% (APR 6.425%).

5/1 ARM 5/2/5 CAPS @ 1 Pt: 4.500% (APR 6.605%).

FHA. Pricing based on credit score of 660 or better and loan amounts up to $417,000 for FHA in King, Snohomish and Pierce Counties.  (Mid-credit scores 620-659 has a 0.25% hit to pricing). 

30 Year Fixed @ 1 Pt: 4.875% (APR 5.515%).

FHA-Jumbo/High Balance. Pricing based on loan amounts from $417,001 - $567,500 for King, Snohomish and Pierce Counties with a 660 or higher mid-credit score. 

30 Year Fixed @ 1 Pt: 5.000% (APR 5.531%).

VA. Pricing based on credit scores of 620 or better based on loan amounts up to $417,000. VA loan amounts over $417,000 are also available.

30 Year Fixed w/1 Pt: 4.875% (APR 5.185%).

USDA Rural Housing. 100% financing with income limits and properties must be located within a specific area (this program is generally available in rural towns with populations of 10,000 or less). For eligibility, click here.  Priced with 60 day lock.

30 Year Fixed w/1 Pt: 5.000% (APR 5.312%).

Prime Rate (what HELOCs are based on): 3.25%

This is just a small sample available of rates and products. This is not a guarantee nor is it a commitment of interest rate.  *For purposes of this post: "1 point" is 1% of the loan amount and would be reflected in line 801 or 808 (depending on whether the loan is brokered or not) Page 2, Section A of the new Good Faith Estiamte. Unless the rate is bought down; there are zero discount points referenced which would be reflected on line 802 of the HUD-1 Settlement Statement  Section A, Page 2 (Your Adjusted Originaton Charges) of HUD's new Good Faith Estiamte.   

Rates are as of February 1, 2010 at 1:00 p.m. and may change at any time. Available programs may change at anytime as well.  To see rates that I'm quoting "live" click here.

If You are in any aspect of the real estate industry, you don't want to miss this...

Both events are at the Seattle Center:

March 18, 2010 - Pacific Northwest Housing Summit  
March 19, 2010 - RE Barcamp Seattle

The panelist for the Summit continue to grow and we anticipate quite a turn out from across the country at both events.  Sponsorship opportunities are still available and start at $250.  

Of course there will be "tweet-ups" and social hours following both days.

Be there!  Follow both events on Twitter: @pnwhs #pnwhs and @REbarcampSEA #rebcsea

PS:  Space is limited to the first 700 registered attendees for the PNWHS...and there's a "sweet heart deal" for pre-registrations by Valentines Day.  

 

Claiming Your Home Buyer Tax Credit

April 15th will be here before we know it and many are preparing for filing their income tax returns.  If you are planning on claiming the home buyer tax credit (up to $8,000 for a first time home buyer or $6,500 for a repeat/long-time resident home buyer) there are some things you need to know as far as what the IRS will require.

First of all, you will not be able to e-file if you're claiming the home buyer tax credit.  This is because the IRS is requiring supporting documentation due to all the fraud that transpired previously with the first time home buyer tax credit.  So along with Form 5405, you may also need to send the following when you submit your return to the IRS:

• a copy of your HUD-1 Settlement Statement with signatures of both parties (your autographs and the Seller's).  In Washington State, this is something you receive from your escrow company.

If you're claiming the tax credit as a "long time resident" home buyer (meaning you've owned and occupied your previous residence for any 5 consecutive year period during the 8 year period ending on the purchase date of your new home), in addition the the Settlement Statement, you will also need to provide the IRS one of the following:

• Form 1098 or Mortgage Interest Statement
• Property Tax Records
• Home owner insurance records

The IRS is requiring this documentation to prove you owned and occupied your home for a minimum of five out of eight years.  And per their instructions:

"These records should be for 5 consecutive years of the 8 year period ending on the purchase date of the new home."

Be sure to review the IRS Instructions for Form 5405 for more information and please consult with your tax professional to make sure you qualify.  My specialty is helping Washington State residents with their residential mortgage needs...not income taxes!

If you are considering buying a home and taking advantage of the first time or repeat (long time resident) home buyer tax, you only have about three months left.   You must have a binding contract (signed purchase and sales agreement) by April 30, 2010 which must close by June 30, 2010.

And the Fed Said...

It's no surprise that the FOMC is leaving the Fed Funds Rate unchanged...the big question is whether or not they are going to extend keeping mortgage rates artificially low beyond March, when the program is said to terminate.    And moments ago, the FOMC Statement confirms that the plans are still sticking to the end of March:

"To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve is in the process of purchasing $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt. In order to promote a smooth transition in markets, the Committee is gradually slowing the pace of these purchases, and it anticipates that these transactions will be executed by the end of the first quarter."

Many experts feel that the Fed's participation in buying mortgage backed securities, which mortgage rates are based on, has kept rates about one full point lower than what they would be with out their helping hand in the markets.

Following the release of this news, mortgage backed securities are deteriorating and I'm anticipating new rate sheets from the lenders we work with featuring pricing for the worse.

Monday Mortgage Rates for the Seattle Bellevue Area...and Beyond

This week could be very dramatic for mortgage rates, which have been steady lately.  Not only do we have all the economic reports/events scheduled below, we are also dealing with the markets reacting to the current uncertainty of the future of our banking system as well as if Ben Bernanke will have a second term as the Federal Reserve Chairman.   Remember, typically bad news for the stock market means improved mortgage rates as investors will seek the safety of bonds (such as mortgage backed securities). 

Also helping mortgage rates is the Fed's purchase of mortgage backed securities keeping rates at artificial lows.  This program is scheduled to stop by the end of March. 

Scheduled ecomonic data to be released this week which may impact mortgage rates (mortgage backed securites/bonds):

• Monday, January 25: Existing Home Sales
• Tuesday, January 26:  Consumer Confidence
• Wednesday, January 27:  New Home Sales, Crude Inventories and the FOMC meeting
• Thursday, January 28: Durable Goods Orders and initial Jobless Claims (next Friday is the Jobs Report)
• Friday, January 29:  GDP, Chain Deflator, Employment Cost Index, Chicago PMI and Consumer Sentitment

Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties). The conforming rate quote below is based on owner occupied with a mid-low credit score of 740 or higher, "full doc" purchase with a sales price of $500,000 and a loan amount of $400,000 single family dwelling (non condo). This scenario includes reserves (taxes & insurance) not being waived. Rates quoted are priced based on a 30-40 day closing with no prepayment penalties on any of the rates quoted below.

30 Year Fixed w/1 Point*: 4.750% (APR 4.094%).

15 Year Fixed w/0.5 Pt: 4.250% (APR 4.511%).

10/1 ARM 5/2/5 CAPS w/1 Pt: 4.250% (APR 5.656%).

7/1 ARM 5/2/5 CAPS w/1 Pt: 3.875% (APR 5.959%).

5/1 ARM 5/2/5 CAPS with 1 Point: 3.500% (APR 6.251%).

Conforming High Balance Rates. Pricing is based on the same criteria above except where the loan amount is $417,001 - $567,500 for properties in King, Snohomish or Pierce Counties; specifically priced for a sales price of $625,000 and a $500,000 loan amount. 

30 Year Fixed @ 1 Pt: 4.875% (APR 5.021%).

Jumbo/Non-Conforming. Loan amounts up to 1 million for ARMs and 1.5 million for the 30 year fixed. The quotes below are based on 740 or higher credit scores with 80% loan to value with a loan amount of $650,000.

30 Year Fixed at 1 point: 5.625% (APR 5.924%).

7/1 ARM 5/2/5 CAPS @ 1 Pt: 4.875% (APR 6.425%).

5/1 ARM 5/2/5 CAPS @ 1 Pt: 4.500% (APR 6.605%).

FHA. Pricing based on credit score of 660 or better and loan amounts up to $417,000 for FHA in King, Snohomish and Pierce Counties.  (Mid-credit scores 620-659 has a 0.25% hit to pricing). 

30 Year Fixed @ 1 Pt: 4.875% (APR 5.515%).

FHA-Jumbo/High Balance. Pricing based on loan amounts from $417,001 - $567,500 for King, Snohomish and Pierce Counties with a 660 or higher mid-credit score. 

30 Year Fixed @ 1 Pt: 5.000% (APR 5.531%).

VA. Pricing based on credit scores of 620 or better based on loan amounts up to $417,000. VA loan amounts over $417,000 are also available.

30 Year Fixed w/1 Pt: 4.875% (APR 5.185%).

USDA Rural Housing. 100% financing with income limits and properties must be located within a specific area (this program is generally available in rural towns with populations of 10,000 or less). For eligibility, click here.  Priced with 60 day lock.

30 Year Fixed w/1 Pt: 5.000% (APR 5.312%).

Prime Rate (what HELOCs are based on): 3.25%

This is just a small sample available of rates and products. This is not a guarantee nor is it a commitment of interest rate.  *For purposes of this post: "1 point" is 1% of the loan amount and would be reflected in line 801 or 808 (depending on whether the loan is brokered or not) Page 2, Section A of the new Good Faith Estiamte. Unless the rate is bought down; there are zero discount points referenced which would be reflected on line 802 of the HUD-1 Settlement Statement  Section A, Page 2 (Your Adjusted Originaton Charges) of HUD's new Good Faith Estiamte.   

Rates are as of January 25, 2010 at 8:00 a.m. and may change at any time. Available programs may change at anytime as well.  To see rates that I'm quoting "live" click here.

Get Updates from The Mortgage Porter via Email

I wrote earlier that I discovered I was having issues with the service I was using for sending updates from my blog via email...so I decided to make a switch.   What this means is that if you were receiving my posts via email, you may need to resubscribe.  It's real easy to do, just enter your email address in the upper right corner and  you'll receive an email to confirm your subscription.

You'll receive email updates whenever I write something...no new post, no email.  And you can unsubscribe at anytime.

100 Days Remaining for the Home Buyer Tax Credit (and my 1000th Post)

My apologies for the home buyer tax credit clock I've added to the left side bar of my blog ticking away the time remaining for home buyers tax credit.  It's not my style, I don't like to pressure folks and I really don't like telling someone that they missed an opportunity. 

Whether you are for or against our home buyer tax credit it is something that many home buyers, first time and "move-up" home buyers, will take advantage of.   Unlike the first tax credit that was passed where the home buyer had to pay it back over 15 years, this is a "tax credit".  This credit repaid if you sell your home within three years. 

The available tax credit for first time home buyers (those who have not owned a home in the last 36 months) is up to $8,000.   For the "move-up" or "long-time resident" (you don't have to be buying a bigger home to qualify), the available tax credit is up $6,500.  The long-time resident is defined as someone who has owned their home as their primary residence for the last three out of five consecutive years.  The tax credit for both first time and long time residents is for the purchase of a primary residence (owner occupied).

Income limits were raised for transactions closing after November 6, 2009 to up to $125,000 modified adjusted gross income (MAGI) for taxpayers and $225,000 for joint filers.  The credit is reduced up to those with MAGI above $145,000 for single and $245,000 for joint.

Homes with a sales price of over $800,000 are not eligible (too bad--the Jumbo market needs all the help it can get). 

In order to qualify for the tax credit, home buyers must be in contract to purchase a home by April 30, 2010 (100 days away as of today)* with a closing date no later than June 30, 2010 (no summer vacations for escrow officers in June).   Home buyers will need to file IRS Form 5405 and be sure to include a copy of their HUD-1 Settlement Statement.

Members of our Armed Forces serving outside of the United States have been granted an extra year for the tax credit.  They must be in contract by April 30, 2011 and close prior to June 30, 2011.

Check with your tax advisor for more information.

Special note: this is my 1000th article posted at Mortgage Porter!  Thanks again for your continued support and readership.