Archives for October 2009

November Recorder’s Office Closures for November for King, Pierce and Snohomish Counties.

November 11, 2009 – Veterans Day (all offices closed)

November 25, 2009 – King County closed.  Snohomish County closes early at 3:30 pm.

November 26 – 27, 2009 – Thanksgiving (all offices closed)

Remember that on Friday's Snohomish and Kitsap Counties close early and to hug your Escrow Officer and Funder.

PS:  November 30, 2009 is the deadline for closings for the first time home buyer tax credit.   The last day King County is open prior to Monday, November 30, 2009 is Tuesday, November 24, 2009.  Not a lot of wiggle room for error should there be any mis-haps at closing.   Also keep in mind that since the furlough closures are due to budget issues, I highly doubt our counties will add extra staff or pay overtime to accomodate the huge record of recordings that may be taking place this date.    Between the potential redisclosure issues with MDIA and HVCC, hopefully first time home buyers are planning on closing in mid-November to avoid the insanity!

What Will Conforming and FHA Loan Limits be in 2010?

Currently, the Seattle area has a "high balance" loan limit of $567,500 for single family dwellings with both FHA and conforming mortgages through the end of this year.

Do you remember when the 2009 loan limit's were announce?  In 2008, our loan limit was $567,500 when the "conforming/FHA jumbo" was created.  Since loan limits are typically based on median home prices, when 2009 loan limits were announced for Seattle, Tacoma and Everett, they were reduced to $506,000.   Congress passed legislation that rolled loan limits in certain (not all) high cost areas back to the 2008 limits which took months for the GSEs to implement and lenders to adopt. 

My point is, don't assume that $567,500 will be the loan limit for the Seattle/Bellevue area in 2010.   It's quite possible that based on current home values, the loan limits could be reduced.   If you are in need of a "high balance" mortgage, waiting may cost you having to use your cash reserves or not being able to finance your home as you had planned.

Mortgage Porter is in the Pink

Your eyes are not playing tricks on you.  My blog is pink and will be pink throughout the month of October for National Breast Cancer Awareness Month and in honor of Michelle Brown, my friend and co-worker who lost her life to this disease.

FHA Adopting Appraiser Independence

FHA appraisals will soon seem similar to those of Fannie and Freddie's HVCC.   I'm hopeful from reading the Mortgagee Letter 2009-08 that FHA's route of improving the relationship between appraisers and loan originators will be healthier than HVCC's (where the banks are profiting from their ownership interest in the unregulated AMCs).

The new requirements go into effect on loans with FHA case numbers issued on or after January 1, 2010.  From the Mortgagee Letter:

"Historically FHA prohibited mortgagees from accepting appraisal reports completed by an appraiser selected, retained or compensated, in any manner by real estate agents.  To ensure appraiser independence, FHA-approved lenders are now prohibited from accepting appraisals prepared by FHA Roster appraisers who are selected, retained or compensated in any manner by a mortgage broker or any member of a lender’s staff who is compensated on a commission basis tied to the successful completion of a loan….

FHA does not require the use of AMCs or other third party organizations for appraisal ordering, but recognizes that some lenders use AMCs and/or other third party organizations to help ensure appraiser independence."

This could be my favorite part:

FHA-approved lenders must ensure that…the fee for the actual completion of an FHA appraisal may not include a fee for management of the appraisal process or any activity other than the performance of the appraisal.

Currently with HVCC (Fannie/Freddie) many appraisers are losing 40-60% of their appraisal fee to AMCs.  Imagine if the AMCs had to disclose this on the HUD to the consumer on conventional loans.  If an appraisal cost $500, the AMC is earning around $250 just for ordering an appraisal.  

Will FHA help right the wrongs of HVCC?  Let's hope so.   You can read some interesting comments on my post about this matter at Rain City Guide.


How Much Home Can I Afford?

This is a common question from first time home buyers.  When working with home buyers who are just beginning the process, after discussing credit and other information, I like to ask in return:

  • What type of monthly mortgage payment would you be comfortable making?
  • How much money are you planning on using for a down payment and closing costs.

To me, it’s better to solve for your potential sales price rather than finding a home or getting your heart set on a certain sales price first before knowing what you actually qualify for.

For example, Seattle Sally has saved up $75,000 and would like to use $40,000 towards a home purchase.  She has been paying anywhere from $2,200 – $2,000 a month for rent and would like to keep her payment around $2000. 

NOTE: Rates quoted below are from October 2009 and are outdated. If you would like a current mortgage rate quote for your home located in Washington, please contact me.

Beginning with a conventional scenario, a payment of $2038 (principal, interest, estimated property taxes, estimated home owners insurance and private mortgage insurance) with about $40,000 for down payment and closing costs would produce a sales price of $325,000.  This is based on a 30 year fixed rate of 4.625%* (apr 4.790).

A sales price of $365,000 with a 10% down payment and the sellers contributing towards closing costs would produce a payment of about $2283.

The only issue I would have with the conventional financing is that private mortgage insurance is that these days, pmi underwriters are picking all mortgages to pieces.

FHA would provide a total payment of $2076 with about $40,000 for down payment and closing costs and a sales price of $325,000.  This is based on a rate of 4.875% (apr 5.400).

If we have the seller pay most of the closing costs and prepaids, a payment of $2287 would produce a sales price of $365,000 with Sally bringing in approx. $38,000 for down payment and closing.

One thing to consider, beyond more forgiving underwriting, with FHA is that your mortgage will be assumable.  Imagine having a rate of 4.875% a few years from now when rates will most likely be much higher.  If you are a seller competing with other similar home on the market, and you can offer an assumable mortgage at a tempting rate–this will be a serious advantage.   Once inflation happens, mortgage rates will be much higher.

If Seattle Sally’s credit score comes in lower than expected (this is all based on very preliminary information) FHA may become a better option as well.  

*rates quotes are as of 1:30pm on October 8, 2009 and are based on mid credit scores of 740 or higher.  Rates can and do change often.  Follow me on Twitter to see live rate quotes.

For your personal rate quote on a home located anywhere in Washington, click here.

RE(mini)Barcamp Takes Place Tuesday, October 6th

Attention all real estate and mortgage professionals:MiniREBC

If you're interested in learning more about social media, come to RE(mini) Barcamp tomorrow in Bellevue at the Meydenbauer.

When:  Tuesday, October 6, 2009 from 8:30 am – noon

Where:  Meydenbauer Center

RSVP: by clicking here

Cost: FREE! 

This is a great chance to learn "peer to peer" with fellow real estate professionals who are implementing social media into their business practices.  

This event is called a "mini" because it's only a half day.  You will have the opportunity to attend three different sessions which will be determined Tuesday morning based on suggestions made by the participants.

Immediately after this event, WAMP will be holding their Annual Awards Luncheon with Spencer Rascoff of Zillow as the keynote speaker followed by the Connect Expo.  You're welcome to stay for either–rsvp here. 

By the way, Washington State Mortgage Originators, you can get 8 hours of continuing education Monday, October 5, 2009 at the Meydenbauer.  Jillayne Schlicke will be the instructor…I'm really looking forward to her classes.

I hope to see you on Tuesday!

Sunday Drive to Andrew Will’s Winery on Vashon Island



Last month we had the opportunity to go to Andrew Will’s 2007 Release Party on Vashon Island.  My husband thought it would be funny to do a “play on words” with my Sunday Drive series…so the video above is of me…”driving”!

Andrew Will’s winery is fantastic and typically not open to the public.   It is a large “compound” and at this event, they serve great food including brick oven pizza along with sampling the wines.   This is unlike anything you’ll find in Woodinville.


I highly recommend this event…I believe you if you sign up to be on Andrew Will’s mailing list, you may receive an invitation.   And the wines?  They’re fantastic!

You can check out more of my photos from Andrew Will’s 2007 Release party by clicking here.

West Seattle Food Drive Today

Update 3:00 pm: My husband and I popped into Thriftway to make our donation just as the event was wrapping up and Prudential agents were loading up the van with shopping carts of donated food for the West Seattle Food Bank.


Prudential Northwest Realty is having a food drive today from 10:00 am to 2:00 pm at these five West Seattle grocery stores. 

Safeway 2622 California Avenue SW, Seattle

Safeway  4754 42nd Avenue SW, Seattle

West Seattle Thriftway 4201 SW Morgan Street, Seattle

Albertsons 10616 16TH Avenue SW, Seattle

Safeway 9620 28th Avenue SW, Seattle

Hat tip to West Seattle Blog.