Archives for November 2009

Only 5 Days Left for FHA Streamline Refi’s Without Appraisals

EDITORS NOTE 6/28/2010:  Since writing this post, many FHA home owners have opted to reduce their mortgage rate via the streamline refi without an apprasial when they have the funds available.

If I wanted a super long title to this article–it should actually read:  "5 Days Left for FHA Streamline Refi's Without Appraisals with Closing Costs Rolled Into the Loan Amount"… but that's just too long.

Back in late September I warned that FHA guidelines are dramatically changing effective on FHA case numbers issued after November 17, 2009.

Considering our current home values, if you currently have an FHA mortgage, this could be your last chance to reduce your rate without having to shell out your hard earned money on an appraisal!

If you have a home located in the State of Washington, I'm happy to provide you with a good faith estimate at no obligation to you.   In order to provide an accurate estimate for you, it would be ideal to have the following information (which you can find on your HUD-1 Settlement Statement):

  • Original base loan amount
  • Amount of your FHA upfront mortgage insurance premium (or portion of your upfront MIP may be credited towards your new FHA loan)
  • Estimated credit score (we currently require a minimum credit score of 620 or higher)
  • Home address (so we can obtain accurate property taxes).

Our company does require that you are employed and will verify your income and credit with an FHA streamline.   We have our own in-house FHA underwriting and are a HUD approved Direct Endorsed lender.   You can apply on line (only for homes located in the State of Washington) by clicking my "apply on line" link on the top of this web site.

You will be able to do FHA streamlines after November 17, 2009…they just won't seem so "streamlined" anymore.

Attention Real Estate Agents: if you have buyers who used FHA financing to purchase their home with mortgage rates around high-5's or higher, you can be a real hero by sharing this article with your clients.

What a Relief! The Home Buyer Tax Credit is Extended

Whether you are for or against the tax credits created by our Congress and President Obama trying to recover our housing industry, you could hear a huge sigh of relief from professionals in the mortgage, escrow and real estate industry on Friday when President Obama signed the extension for the first time home buyer tax credit which was set to expire at the end of this month.

If you've been reading my posts for the last few months, you know I've been trying to warn potential home buyers eying that credit of what a short month November is for closing real estate transactions–with or without the tax credit.   The November 30th deadline did spur on some last minute transactions for first time home buyers.  Many mortgage companies issued memo's to borrowers regarding the tax credit stating they would not be held liable in the event the transaction did not close in time. Now, if the transaction closes on December 1, and the borrower qualifies for the credit, the home buyer won't be robbed of the credit…which could be up to $8,000.   Whew!

Speaking of relief, check out this vintage Alka Seltzer commerical singing about passing bills in Congress.  

Not only was the first time home buyer tax credit extended to April 30, 2010, Congress added a tax credit for existing "long time residents" (defined as owning a home during the last 5 out of 8 years) buying another home of up to $6500.  In addition, income limits for the tax credits have been dramatically increased. 

I will be providing more details soon about both of these tax credits for home buyers at Mortgage Porter soon!

Domestic Partners, Real Estate and Mortgage

In May of this year, Governor Gregoire signed legislation providing registered domestic partners in Washington State the same rights as married couples, which has been confirmed by the passage last week of Ref 71. In our State, domestic partners are defined as either same sex couples or where at least one partner is over the age of 62 (they do not have to be of the same sex).  

From E2SSB 5668:

"It is the intent of the legislature that for all purposes under state law, state registered domestic partners shall be treated the same as married spouses.  Any privilege, immunity, right, benefit, or responsibility granted or imposed by statute, administrative or court rule, policy, common law or other law to an individual because the individual is or was a spouse, or because the the individual is or was an in-law in a specified way to another individual, is granted on equivalent terms…"

When a couple registers as a domestic partner and if one or both partners (or spouse) owns real estate where they reside, they are now subject to community property issues as Washington is a community property state.

From the Washington State Bar Association (regarding community property):

Under this system, all property acquired from earnings during marriage (such as real estate, automobiles or household goods) belongs equally to husband and wife, even when only one is employed.

Similarly, both husband and wife are personally liable for certain types of family expenses, even if both did not agree to the particular obligation….

Moreover, neither may give community property without the consent of the other. Finally, neither may sell, convey or encumber real property (land) without both parties signing appropriate documents.

Recently I was helping a man with a refinance whom I thought was "single".  He was the sole person on loan application and did not indicate that he had a partner.  The title company discovered that he and his partner registered as domestic partners with the State of Washington.  

With regards to the refinance, this meant that my client's partner would need to either be approved on the mortgage as well or have to sign a quit claim deed and acknowledge the transaction to be in compliance with state laws.  NOTE:  Please seek legal counsel before signing legal documents that may impact your rights.

As of today, November 6, 2009, there are 6,311 domestic partnership registrations in Washington.  If you and your partner have a registered domestic partnership–CONGRATS!  If you have a registered domestic partnership and you are involved in a real estate transaction; be sure to inform both your mortgage originator and real estate agent.  One cannot buy or sell or mortgage/encumber real estate with out the other's consent…just like being married.

FOMC leaves the Fed Funds Rate Unchanged

I'm just reading through the Fed's press release which announces that they are leaving the Fed Funds rate unchanged at 0-0.25%.  Good news for those of you with variable rates on your home equity loans–your rate is not going up…yet.

From today's FOMC Statement:

Conditions in financial markets were roughly unchanged, on balance, over the intermeeting period. Activity in the housing sector has increased over recent months. Household spending appears to be expanding but remains constrained by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit.

The Fed's statement is fairly positive and good news for the economy means that investors will trade the safety of bonds (such as mortgage backed securities) for stocks; causing mortgage rates to trend higher.  In addition, the Fed reiterated they will be phasing keeping mortgage rates at artificial low rates by March 2010.

To provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of $1.25 trillion of agency mortgage-backed securities and about $175 billion of agency debt. The amount of agency debt purchases, while somewhat less than the previously announced maximum of $200 billion, is consistent with the recent path of purchases and reflects the limited availability of agency debt. In order to promote a smooth transition in markets, the Committee will gradually slow the pace of its purchases of both agency debt and agency mortgage-backed securities and anticipates that these transactions will be executed by the end of the first quarter of 2010.

The next big market mover that tends to dramatically impact mortgage rates is the Jobs Report.  Watch for it this Friday morning.