Archives for October 2011

Mortgage Master Service Corporation receives Outstanding Lender Award

MmscawardI'm very proud of my employer, Mortgage Master Service Corporation, the Porter family and my co-workers for being recognized last night at the Washington Association of Mortgage Professionals (WAMP)  2011 Leadership Awards for Outstanding Lender (retail mortgage company).  

Mortgage Master Service Corporation was established in 1976 by the Porter family (my in-laws) and it was such an honor to be there with Marilyn Porter, President of Mortgage Master, and my sister-in-law, to receive the award.

I'm honored to be one of four finalist for Outstanding Mortgage Originator in Washington State by WAMP.

Congrats to all the nominees and those who took home awards last night. It was a fun evening made extra special by enjoying it with my sister, Nicole Christy, Frank Garay and Brian Stevens, Anny Havland as just few of the fine folks at our table. And it was nice to so many old friends after being in the industry for 25 years.

Photo credit: Nicole Christy (my sister and Account Executive at Kinecta Credit Union).

Washington Association of Mortgage Professionals honors the “Best of the Best” Tonight

Tonight the Washington Association of Mortgage Professional is celebrating their 25th anniversary with a formal awards gala recognizing individuals and companies who have been nominated by their peers as being the best in Washington.

I am honored to be one of four finalist for Outstanding Mortgage Originator and that my employer, Mortgage Master Service Company is one of three mortgage companies in the state being recognized as an Outstanding Retail Lender. Mortgage Master Service Corporation is owned and managed by my in-laws, so I'll be attending tonight's event with my sister-in-law and President of Mortgage Master Service Corporation, Marilyn Porter. The family affair continues as we'll be sitting at my sister's table, Nicole Christy, who's an Account Executive for Kinecta Credit Union.

It's going to be a special evening regardless of who leaves the event with an award.

WAMP's Leadership Awards Gala begins tonight at 6:00 pm at the Renaissance Hotel in Seattle.  More info here.

Announcing the New & Improved Home Affordable Refinance Program (HARP 2.0)

We've been waiting to see what the "new Obama refi program" would be and this morning, the Federal Housing Finance Agency published a news release announcing new changes with the goal of reaching more borrowers. Home Affordable refinances are available to home owners who have a mortgage that is securitized by Fannie Mae or Freddie Mac on or before May 31, 2009. 

Here are some of the changes that are being made to HARP:

  • Removing the 125% loan to value ceiling for fixed rate mortgages. If refinancing into an adjustable rate mortgage there is a 105% cap.
  • Eliminating the appraisal where there is reliable AVM estimate available. Currently some Fannie Mae HARP refi's have qualified to have appraisals waived, it appears this may become more of the norm with HARP refi's.
  • Eliminating certain risk-based fees for borrowers who refinance into shorter-term mortgages and reducing fees for other borrowers;
  • Extending the end date of HARP until December 31, 2013 for loan originally sold to Fannie or Freddie on or before May 31, 2009 (note – the date a loan was sold to Fannie or Freddie is different than the date you closed on your refinance).

Borrowers must be current on their mortgage payments with no late payments in the past 6 months an do not have more than one late payment in the past 12 months.

HARP refinances are available for single family dwellings and condos as well as owner occupied, second homes and investment properties.

You DO NOT have to use your current mortgage servicer (who you currently make your mortgage payments to) for your Home Affordable Refinance unless you currently have private mortgage insurance. If your home is located anywhere in Washington State, I can help you with your mortgage needs.

If you have been turned down for a Home Affordable refinance because of a low appraised value and you otherwise qualified – this is your second chance!

More information is to be available by November 15, 2011.  Stay tuned!

UPDATE: Here are some tips for preparing for your HARP 2.0 refinance BEFORE you apply.

Conforming and FHA Higher Loan Limits MAY be Returning

The Senate has passed an amendment that will bring the temporary loan limits back through December 31, 2013!  In the Seattle/King County area, this means that the FHA and conforming high balance loan limit would increase from $506,000 to $567,500.

This still needs to pass the House.

It's like deja vue all over again! Congress yo-yo'd the loan limits a few years ago between the high balance and temporary high balance loan amounts.  Should Congress pass this and restore the higher loan limits, it may take banks some time to adjust to the changes. 

Stay tuned!

How Disputes on Your Credit Report May Impact Obtaining a Mortgage

Reviewing your credit report and disputing information that is being wrongly reported about you is your right under the Fair Credit Reporting Act. Obtaining your credit report and making sure that it’s accurate is financially responsible and your duty to protect your credit. And the Federal Trade Commission provides you tips on how to dispute items on your credit report.  Did you know that lenders may not accept a credit report where it indicates there is a disputed item? 

It doesn’t matter if you have perfect credit or a low loan to value, Fannie Mae and Freddie Mac guidelines are forcing lenders to provide a credit report without disputes. I’ve recently had transactions where the borrower doesn’t recall disputing anything and the debtor doesn’t have record of the dispute yet this “dispute” needs to be removed from the credit report or the lender/bank will not accept the loan. This is one reason why anyone considering a mortgage for refinancing or purchasing a home should obtain a copy of their credit report very early on. It can take a great deal of time to have disputes removed if a borrower does this on their own.  

The other option is for a “rapid rescore” which whittles down the process to days. The irony in this is that rapid rescore is not free and it is the credit bureaus and reporting agencies who profit when this service is done – I really have a problem with this when my client and the creditor state there are no disputes of record yet somebody has to pay to have these items quickly removed to accommodate a closing date. Often times, the lender absorbs the cost of the rapid rescore however this eventually drives up the overall cost of doing business and eventually, the consumer pays.

In my opinion, this is something that Fannie Mae and Freddie Mac need to change pronto. Well qualified borrowers should not have to go through these hoops or have their mortgage denied. A simple written letter of explanation signed by the borrowers and possibly the creditor *should* suffice instead of requiring the credit report not show any sign of a dispute. Apparently back in 2009, Fannie was reviewing their policy however, I’m not aware of any significant changes.  

If our government wants to help the housing industry and our economy, this practice needs to stop now.

How Much Home Can I Buy in Seattle with $45,000

I'm working with a couple who have saved $45,000 to buy a home in the greater Seattle area. Since conforming and FHA loan limits have been reduced to $506,000 in King County for the remainder of 2011, it reduces what they could have purchased a month or two ago. 

FHA.  Using an FHA insured mortgage, the couple can buy a home with a sales price of up to $551,000 assuming the seller pays for their closing cost and prepaids or that rebate pricing is used to cover closing cost and prepaids (or a combo of both).  The buyer must pay for the down payment with their own funds and gift funds are allowed by family for the down payment.  This is a pretty straight forward $506,000 loan limit pluse the $45,000 down payment.  

Conventional. $462,000 is the highest sales price with conventional financing based on using a conforming mortgage of $417,000 which would have the loan to value just over 90%. This scenario would also have private mortgage insurance which could be paid monthly, in a one time lump sum or as a "split premium" (a combo of both). With a loan to value of just over 90% means that the rate of private mortgage insurance will be much higher than if the buyers stick to a 90% loan to value. With a loan to value just over 90%, sellers are limited to contributing 3% towards closing cost.

If the buyers go this route, the maximum sales price they would qualify for with 10% down payment is $450,000 and sellers can contribute up to 6% towards allowable closing cost.

Conforming High Balance:  Loan amounts from $417,001 to $506,000 in the Seattle area may go up to 90% loan to value with private mortgage insurance, however 10% of the funds (the down payment) must be the borrowers and gifts are allowed only after the borrower has met the 10% requirement. Conventional loan amounts over $417,000 don't appear to pencil out for this scenario.  

NOTE: With conventional mortgages, if the gift from family is 20% or more, then there are no minimum required investments for the borrower.

VA. If my clients had served in the military and qualified for a VA loan, the maximum sales price in King County with a $45,000 down payment would be $680,000 assuming the sellers pay for all closing cost and prepaids or rebate pricing is used to offset the cost.

Technically, home buyers do not qualify for a "sales price".  They qualify based on the total mortgage payment (income and debts) and based on what funds they have available for down payment will dictate how much "sales price" they can buy.

If you would like to see what sales price you qualify for or become preapproved to buy a home anywhere in Washington, please contact me.

Checking Out Rates on the Internet, Newspaper or TV? Check the Freshness Date.

When I’m reviewing rates with clients, many are surprised to learn how quickly pricing can change. It’s not unusual to hear a home buyer or someone considering a refinance say, “well how come I see “X” rate on the [insert your media here: internet, newspaper, television commercial, you get the idea]”.

As soon as a rate is posted, even on the internet, it may have changed. This is because mortgage rates are based on mortgage backed securities (bonds) and can change several times a day, similar to the stock market and sometimes just as volatile.  The more fresh a quoted mortgage rate is, the better odds you have of it being reliable.

[Read more…]

Mortgage Update for the Week of October 10, 2011

Today we recognize Christopher Columbus which means that the bond markets are closed. Did you know that October 9th is Lief Erikson Day?  Speaking of Europe, the DOW is up 277 as I write this post (10:35 am) since it looks like Europe may be getting closer to solving their financial crisis.  There are no economic indicators scheduled to be released today.

Here is what's scheduled for the remainder of the week:

Wednesday, October 12:  FOMC Minutes

Thursday, October 13:  Balance of Trade and Initial Jobless Claims

Friday, October 14: Retail Sales and Consumer Sentiment (UoM)

Remember, typically good news for the stock markets tends to drive mortgage rates higher as investors will trade the safety of bonds (like mortgage backed securities) for the greater returns possible with stocks. Last Friday was an example of this when the Jobs Report was released with better than expected data.

While we hope for good news for our economy and signs of recovery, keep in mind that this may cause mortgage rates to trend higher. Signs of inflation will also drive mortgage rates higher.

Although rates are still historically low, they have been trending higher over this past week. 

With the bond markets closed for Columbus Day, some of our lenders are taking the day off and we do others available should you decide you want to lock in a mortgage rate today for purchase or refinance in Washington.

Happy Columbus Day and belated Leif Erikson Day.