Is Your Mortgage Originator Licensed or Registered

The SAFE Act was enacted in July 2008 to help create a national standard for residential mortgage originators.  This is a fantastic idea EXCEPT that if a mortgage originator works for a depository bank, like Bank of America, Chase, Citi or Wells Fargo (just to name a few) they are excluded from licensing.  Mortgage originators working for a bank will only have to be registered…and  yes, there is a difference

In Washington state, Licensed Mortgage Originators, per the SAFE Act, are required to:

  • submit fingerprints for a state and federal background check  
  • submit personal history and experience (MU-4 form)
  • will have a unique identifier number. (I’m NMLS MLO-121324)
  • demonstrate financial responsibility (LO’s will have their credit checked)
  • take 20 hours of approved pre-licensing education
  • pass the state and national mortgage exam by 75% or better
  • will take 8 hours of continuing education annually
  • may never have had a license revoked (I’ve been licensed with DFI since 2007)

Registered Mortgage Originators aka Federal Mortgage Originators (those who work for depository banks and who are not required to be Licensed) per the SAFE Act, are (eventually) required to:

  • submit fingerprints for a state and federal background check
  • submit their personal history and experience (MU-4 form)
  • will have a unique identifier number 

A registered mortgage originator banker will probably tell consumers that they don’t need to do all the measures that a licesned mortgage orignator does because it’s in house (ask them and listen to their response) –so why not be held to the same standards as a licensed mortgage originator?  Why not try passing the national and state exams?  NOTE: If a non-licensed mortgage originator (registered mortgage originator/banker) tries to tell you that mortgage brokers are licensed because they are the cause of the mortgage crisis, please remind them that it was the mortgage banks that created and underwrote the mortgage programs AND it is the mortgage banks who hired their reps to call on mortgage brokers to push their programs. 

If Congress truly wanted to serve the people, they would have created the same standards for all mortgage originators regardless of campaign contributions, lobbyist, the type of institution they’re employed by.  Consumers should not have to sort out the differences between a Licensed or Registered mortgage originator.  ALL MORTGAGE ORIGINATORS SHOULD BE LICENSED.   

PorterConsumerAccess 

Here’s what my profile looks like on the NMLS Consumer Access site.  You can click the image below to see a larger image or visit http://www.nmlsconsumeraccess.org/ and either enter my name and Washington State or my NMLS LICENSE Number: 121324.  

Towards the bottom of the NMLS Consumer Access site, you can see if your mortgage originator is licensed and which states they are currently licensed to originate mortgages in.  If the mortgage origninator is not licensed and are only required to be registered, it will state: “Federal Mortgage Loan Originator”. If your LO is a Federal Mortgage Loan Originator, they are not held to the same standards per the SAFE Act as a Licensed Mortgage Loan Originator. Period. When a “FMLO” tells you they’ve been regulated far longer than MLOs, simply point to Washington Mutual, Countrywide or World Savings and how successful the federal regulators were overseeing mortgages for those banks.

I encourage consumers to do their own research on mortgage originators BEFORE they start working with them.   Depending on various factors, at the time of the publishing of this post, they may or may not be entered into the registry (especially if they work for a bank).   Do check them out.   Consumer Access by the NMLS does provide you with a history on your mortgage originators IF they’re in the system.  If they’re not in the system find out why.   And of course, you can always “Google” the mortgage originators name to try to learn more about them. 

Mortgage licensing is actually the very issue that launched me into blogging over three years ago.  I was bothered by the misinformation by the media that “all mortgage originators” are licensed which was not true. 

Who would you rather have assist you?  A mortgage originator with a license they must maintain (or they risk losing it) or someone who is simply registered

Related post:   Are Washington Consumers safer working with a DFI Regulated (Licensed) Loan Originator

If the Bank doesn’t charge an “overage or points”…what do you call this?

It really gets my goat when I see statements on the internet that are intended to lead the consumer to believe that someone or some institution is better than someone else…especially if the comment that is being spewed seems misleading to me.

Just a few moments ago on Twitter, a mortgage originator from Bank of America posted:

Bank of America DOES NOT CHARGE OVERAGES/POINTS to close Home Loans. Building trust with our customers is #1! 

Her "tweet" also included a link to an article from Jack Guttentag which has me a bit riled and I'll probably address soon in a separate post.  [see update below].

Bank of America has changed their compensation program for their mortgage originators. It's my understanding the mortgage originators are rewarded based on the volumes they originate.  (I have serious concerns on how this is better for the consumer). This will continue to happen with banks and I believe that DFI is in the process of trying to do the same with mortgage originators who are licensed in Washington State.   A consumer might assume that due to the tweet above, they're paying less for a mortgage rate and perhaps should select this mortgage originator and/or the bank she works for. 

I decided to check out Bank of America's website to price a rate based on the same criteria I used this morning.   Their rate for a 30 year fixed mortgage in Seattle was not only 0.125% higher in fees, it's also 0.125% higher in RATE than what I quoted hours ago.

BOA_fees

This clearly states 1.125% in points to be paid for a 30 year fixed at 4.875%. (click on image for a larger picture).

UPDATE:  Here's Jack Guttentag's definition of an overage, per the article the Bank of America mortgage originator tweeted about:

It is the difference between the price a lender posts with its loan officers — which is the price the lender expects to receive — and the price the loan officer charges the borrower. If the posted price is 5 percent and zero points, for example, and the loan officer charges the borrower 5 percent and half of a point, the half-point is the overage

Perhaps it's an overage only if the mortgage originator is compensated the gainWhat if it's the bank who's gaining the overage–is it okay to have the consumer pay more then?  Banks are…well…banking it.

Consumers need to continue to be aware and to be responsible for their personal financial interest.   

Mortgage Rates for a Stormy Seattle Morning

Wednesday is the "official" last day of the Fed's support of keeping mortgage rates at their manipulated low rates through their purchasing of MBS (mortgage backed securities).   And on Friday, which is a holiday for the stock market, we have the ever-important Jobs Report.  The stock market will be closed in observance of Good Friday, however the Bond market will be open until noon ET.  For those of us on the west coast, it should be an interesting morning to see how the bond traders react to the data released on a "half day".

This is your last chance to have FHA upfront mortgage insurance at the reduced rate of 1.75%.  Effective on case numbers issued on April 5, 2010, FHA upfront mortgage insurance is increased to 2.25% of the loan amount.  If you have an FHA loan in process, please confirm with your mortgage originator that you do have an FHA case number — DO NOT WAIT UNTIL FRIDAY!!

I have removed USDA loans from my weekly rate posts since they are running out of funds.  Good news: our source for 203k FHA rehab loans appears to have caught up with their backlog…Mortgage Master is now offering this much needed product again.

As of today, there are 32 days remaining for qualified home buyers to get into a mutually accepted contract and qualify for the home buyer tax credit.

This week we have the following scheduled economic indicators which may impact rates:

Monday, March 29:  Personal Income, Personal Consumption, Personal Spending and Core PCE

Tuesday, March 30:  Consumer Confidence

Wednesday, March 31:  ADP National Employment Report, Chicago PMI and Crude Inventories. 

Thursday, April 1:  Initial Jobless Claims, ISM Index

Friday, April 2:  The Jobs Report.  NOTE: The Stock Market is closed and the Bond Market will close at 12:00 ET in observance of Good Friday.

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 4.906%).  

15 Year Fixed w/1.5 Pt: 4.125% (APR 4.477%).  Priced with 0 Pts: 4.250% (APR 4.364%).

10/1 ARM 5/2/5 CAPS w/1 Pt: 4.125% (APR 5.580%).

7/1 ARM 5/2/5 CAPS w/1 Pt: 3.750% (APR 5.899%).

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 w/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: 5.500% (APR 5.797%).

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 5.5515%).

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%).

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 on Page 2, Section A of the new Good Faith Estimate. Unless the rate is bought down; there are zero discount points referenced which would be reflected on Section A, Page 2 (Your Adjusted Origination Charges) of HUD's new Good Faith Estimate.   

Rates are as of March 29, 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.

Hold Everything! What is Your Title Company’s Recording Protocol?

Satchmortgageporter If you’re a long time reader of The Mortgage Porter, you know that my pre-mortgage career was in the title and escrow industry.  One of my early jobs was preparing documents to be recorded at King County.  Later in my career, as a sales rep, I would sometimes have the opportunity to “be a hero” by driving “rush recordings” directly to the court house in Seattle and either meeting the title company’s recorder or actually having to “walk on” the documents myself. Recordings are the deeds and deeds of trust that will be recorded at the county to become public record to give the world notice that you now own the land or have debt attached to the property.  (It also gives scammers notice to hound you with loan and other offers).

On a recent transaction, I learned that all title companies are not the same when it comes to how the manage their recordings.  When a title company receives documents from the escrow company, they are typically “on hold” meaning–do not record yet; or they’re a “walk on” which means, record as soon as possible.  It’s my understanding that most title companies keep holds at King County UNLESS they have verified with the escrow company that the documents are not scheduled to close for some time.  

This transaction involved a title company who apparently keeps recordings for King County at their Lynnwood office until they know they are released for recording and then they are sent with their recording courier.   Problems can arise when recordings are released later by escrow or if the courier faces high volumes of traffic with her commute to Seattle (what are the odds of that?).  I have been informed by their Senior Title Officer that they are changing their policy on keeping holds at their office.

It could be worth asking your preferred King County title provider:


Where do they keep recordings that are on hold? 

Will they do a special courier to the court house if needed? (a title rep can do this) 

Hopefully the recordings are kept at King County (or the appropriate county) so that in the event of a later release, the documents are prepared and ready to go to avoid delays with closings. 

Related Post: 

What Takes Place Between Signing and Closing

Is Your Agent in Bed with a Title Company?

Who’s Who with Local Title Companies

Mortgage Interest Rates for Washington State

Mortgage rates appear to be hanging steady from last week's rate post.  This week we have the following scheduled economic indicators which may impact rates:

Tuesday, March 23:  Existing Home Sales

Wednesday, March 24:  Durable Goods Orders, New Home Sales and Crude Inventories

Thursday, March 25:  Initial Jobless Claims

Friday, March 26:  GDP Chain Deflater and Consumer Sentiment Index

Next week, the Fed will officially stop their support of mortgage backed securities, which has been keeping mortgage rates at their artificial lows.  Followed by the Jobs Report on Friday, which tends to be a real market mover.

Next week is also the last chance to have FHA upfront mortgage insurance at the reduced rate of 1.75%.  Effective on case numbers issued on April 5, 2010, FHA upfront mortgage insurance is increased to 2.25% of the loan amount.

As of today, there are 39 days remaining for qualified home buyers to get into a mutually accepted contract and qualify for the home buyer tax credit.

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 Points*: 4.750% (APR 4.841%).  Priced w/0 Points:  4.875% (APR 4.388%)

15 Year Fixed w/1 Pt: 4.125% (APR 4.460%).

10/1 ARM 5/2/5 CAPS w/1 Pt: 4.125% (APR 5.580%).

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 6.163%).

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 w/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: 5.500% (APR 5.797%).

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: 4.750% (APR 5.382%).

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%).

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 on 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 Section A, Page 2 (Your Adjusted Origination Charges) of HUD's new Good Faith Estimate.   

Rates are as of March 22, 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.

The Pacific Northwest Housing Summit and Seattle RE Barcamp

PNWHSREBCSEA 266 
Hard to believe after months of planning, the Pacific Northwest Housing Summit and Seattle RE Barcamp events are done. 

PNWHSREBCSEA 239

During the Housing Summit, I brought my netbook and provided a stream of updates via my Mortage Porter Twitter account and for PNWHS on Twitter.  Overall I was very pleased with the event–there was a lot of good information (not all positive) shared with what to expect with housing in our area.   The wrap-up post on the Housing Summit site will continue to be updated with articles as I find them.  I was a bit disappointed that more real estate professionals did not show up for the event.  I'm chalking it up to it being a reflection of the current state of our industry…especially mortgage originators.  It's true that there were not continuing education clock hours valuable for LO's due to the NMLS requirements, but I don't that's reason enough to not attend an event like this.  I wonder how many are planning to stick around in this industry as the bar continues to raise and disclosure forms continue to pile on.  The job is much tougher than what it used to be and if the Fed (and big banks) have their way, our income will be reduced to peanuts.  Good luck finding an experienced mortgage originator to assist you with your largest investment…sorry…didn't mean to digress!  

PNWHSREBCSEA 264 Seattle RE Barcamp was a blast.  I enjoyed really enjoyed volunteering for this event and strongly encourage others to do the same.   Since it followed the Housing Summit, there were topics suggested that were beyond social media as I had hoped. 

My only regret is that I couldn't attend more sessions!  PS… if you have any photos or videos from the event, feel free to post them at the Flickr group.

We had folks from all over the country join us at the Seattle Center on last Thursday and Friday for the Housing Summit and RE Barcamp.   I really enjoyed finally meeting Frank Garay and Brian Stevens from Think Big Work Small.  I appreciate their efforts in keeping mortgage professionals up-to-date with current issues facing our industry laced with humor on their vlog.

Thank all of you for making both these events so special!

Mortgage Interest Rates

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 Points*: 4.750% (APR 4.841%).  Priced w/0 Points:  4.875% (APR 4.388%)

15 Year Fixed w/1 Pt: 4.000% (APR 4.333%).

10/1 ARM 5/2/5 CAPS w/1 Pt: 4.000% (APR 5.554%).

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 6.163%).

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 w/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: 5.500% (APR 5.797%).

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: 4.750% (APR 5.382%).

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%).

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 on Page 2, Section A of the new Good Faith Estimate. Unless the rate is bought down; there are zero discount points referenced which would be reflected on Section A, Page 2 (Your Adjusted Origination Charges) of HUD's new Good Faith Estimate.   

Rates are as of March 15, 2010 at 11:00 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.

I hope to see you at The Pacific NW Housing Summit & Seattle RE Barcamp

The Pacific NW Housing Summit and RE Barcamp Seattle are taking place this week on Thursday, March 18 and Friday, March 19, 2010. If you are in any aspect of the real estate industry, I hope to see you at both events!