Archives for November 2011

The Risk of Extended Closings

With more short sales taking place, many home buyers are having to wait months before their closing date is here. The same may be true for those who are buying homes that are being constructed.  With a delayed closing, there are some additional risk involved that buyers should be aware of so they can take action, when possible, to protect themselves. Some risks, borrowers have more control over than others. [Read more…]

FHA Loan Limits will be higher than Conforming in Seattle for 2012

Well it looks like our Congress has passed loan limits for 2012 restoring FHA's higher "temporary" loan limits (pre October 1, 2011) and preserving the current loan limits for conventional mortgages.  

From the press release by the Appropriations Committee:

The bill does not increase the maximum loan limits for Fannie Mae and Freddie Mac. These entities have been under public scrutiny for their questionable businesses practices and use of billions in federal bailout funds, some of which have been used for extravagant management bonuses. The bill limits the increase in the conforming loan limits to only the Federal Housing Authority (FHA), which is subject to greater congressional scrutiny and oversight.

Congress is essentially punishing home owners for the sins of Fannie Mae and Freddie Mac execs. Personally, I think it's too bad that they didn't state this was done to help stimulate private lending instead of using this as an opportunity to publically wag a finger at Fannie and Freddie.

It appears the loan limits for 2012 in King County, Pierce County and Snohomish County for a 1-unit property will be:

  • $506,000 for Conventional
  • $567,500 for FHA

Once the GSE's and HUD officially announce the conforming and FHA loan limits for 2012, I'll be posting them here.

Stay tuned!

Update Nov 22, 11: Here is FHFA's press release regarding the 2012 conforming loan limits confirming they will remain the same for 2012 – except for one county (not in Washington state).

Would You Like a HARP 2.0 Rate Quote for your Home in Washington State?

If you prefer to use our online form to provide us with information for your rate quote for a Home Affordable Refi in Washington, click this link.  Or you can copy and paste the questions below and send me your info via email.

Here are 10 quick questions that I need answers for in order to provide you with a quote (if your answers on 1-3 are “yes”, please proceed with the remaining questions for your HARP 2.0 rate quote):

  1. Is your home located in Washington State? [I’m only licensed to originate mortgages on residential property located in Washington].
  2. Is your mortgage securitized by Fannie Mae or Freddie Mac?  [You can click these links to verify].  
  3. Did you close on this mortgage prior to June 1, 2009? [Note: HARP is available for mortgages “securitized” by Fannie Mae or Freddie Mac before 6/1/09 – “securitization” actually takes place after closing.
  4. Do you currently have private mortgage insurance and/or lender paid mortgage insurance?
  5. Do you have a second mortgage/home equity line of credit? If so, what is the mortgage balance? [Note: second mortgages cannot be included in the HARP refi and will be subject to their approval to be subordinated]
  6. What is the principal balance of your mortgage?
  7. Is this property your: primary residence, second home or investment?
  8. Is this property a condo, townhome or single family residence?
  9. How do you rate your credit?  Excellent, pretty good, good, okay or blemished – if you know your credit scores, please provide them.
  10. What program do you like to see quotes on: FIXED: 30 year, 20 year, 15 year, 10 year; or ADJUSTABLE: 5/1, 7/1 or 10/1.

NOTE: As we learn more about this program, we will continue to update you here at Mortgage Porter.  Read my latest post about the Home Affordable Refinance Program.

These pages will be updated as we receive more information:

Fannie Mae – Home Affordabe DU Refi Plus

Freddie Mac – Home Affordable Streamline Refinance – Open Access

I am required to have the language below if I am soliciting your Home Affordable Refi for your home in Washington…and yes, I would love to help you with your HARP (or any) refinance:

Freddie Mac and Fannie Mae have adopted changes to the Home Affordable Refinance program (HARP) and you may be eligible to take advantages of these changes.

If your mortgage is owned or guaranteed by either Freddie Mac or Fannie Mae, you may be eligible to refinance your mortgage under the enhanced and expanded provisions of HARP.

You can determine whether your mortgage is owned by either Freddie Mac or Fannie Mae by checking the following websites: or

Last updated: January 25, 2013

What You Need to Know about HARP 2.0: the Home Affordable Refinance Program

Yesterday, we received more details about the new and improved Home Affordable Refinance Program (HARP 2.0) which is available for home owners who have a conventional mortgage that was securitized by Fannie Mae or Freddie Mac prior to June 1, 2009. (Securitized is different than your close date and takes place sometimes several weeks AFTER your loan has closed).  

I've written more information about HARP 2.0 here.  HARP 2.0 removes the loan to value cap of 125% and allows some transactions to take place without an appraisal. If your mortgage qualifies for this refinance program, it is well worth your time to obtain a rate quote to see if you can reduce your mortgage payment, shorten your term or fix your adjustable rate mortgage. If your home is anywhere in Washington State, I can help you with your home affordable (or any) refinance.

Here's what you need to know about HARP 2.0:

  • HARP 2.0 is effective for loan applications dated December 1, 2011 or later. Here's what you can do to prepare while you wait to apply for HARP 2.0.
  • For your primary residence, if you opt for a 20 year fixed term or shorter, there are no additional hit to fees (LLPA – risk based pricing). Should you select a 30 year fixed term, the "hit" to fee is limited to 0.75%.  Read more about Fannie Mae's LLPA's here.  What this means in a nut-shell is that HARP 2.0 will have lower rates than other conventional (non-harp) refis.  
  • Fixed rate mortgages will not have the 125% loan to value restriction (no maximum loan to value); however should you opt for an adjustable rate mortgage, the maximum loan to value will be 105%. [update: higher loan to values will be increased in phases for this program].
  • No mortgage lates are allowed during the last six months and only one late payment allowed during the last year (seven to twelve months ago).
  • YOU  DO  NOT  HAVE  TO  RETURN  TO  WHERE  YOU  MAKE  YOUR  CURRENT MORTGAGE  PAYMENT  TO  FOR  YOUR  NEW  HARP 2.0  REFINANCE.  …Yes, I'm shouting 🙂  If your home is located anywhere in Washington State, I can probably help you with your refinance. However…
  • Borrowers who currently have LPMI (lender paid mortgage insurance) need to return to their current mortgage servicer (who they make their mortgage payments to) for a HARP 2.0 refinance.
  • HARP is available for owner occupied, second or vacation homes and investment properties. It's okay if the occupancy type has changed from when you obtained your last mortgage. If your previous primary residence is now a rental, this is acceptable with HARP.
  • Condos should not require additional review as long as there is adequate insurance coverages in place for HARP 2.0.
  • HARP loan amounts are limited to current conforming loan limits and does not grandfather the previously higher "temporary" loan limits. The conforming loan limit in the greater Seattle area for a single family dwelling is $506,000 through 2012.
  • A Borrower may be removed from a HARP refinance (divorce, etc.) as long as they can document that the remaining borrower has been making the mortgage payments with their own funds the past 12 months. (This is not a new guideline). If the refinance's purpose is to "buy-out" the borrower, it will not qualify for a HARP refinance.
  • A few borrowers who previously refinanced using HARP may be able to refinance using HARP 2.0 (loans acquired by Fannie Mae between March 1, 2009 and May 31, 2009).
  • If you have a second mortgage or HELOC, the second lien holder still needs to approve the refinance and agree to be subordinated.

So now we wait for December 1st and for our wholesale lenders and banks to adopt Fannie and Freddie's revised HARP 2.0 guidelines. Here is what you can do to get ready before you apply on December 1, 2011.  We are preparing to accommodate your request for HARP 2.0 rate quotes and transactions – the more prepared you are will make your transaction progress more smoothly.

We are now accepting requests for HARP 2.0 rate quotes for homes located anywhere in Washington State. You are welcome to submit a rate quote request, which will be sent to you once the new HARP 2.0 rates are available (December 1, 2011 and later).

NOTE: For HARP 2.0, we are pleased to offer Fannie Mae DU Plus and Freddie Mac Open Access for Home Affordable refinances.

Thank YOU, Veterans


As General Colin Powell said in an interview last night, "every day should be Veterans Day".  A heartfelt thank you to those who serve our Country and their families.

Mortgage Master Service Corporation is closed today in observance of Veterans Day.

Before You Go to Your Signing Appointment [Updated]

EDITORS NOTE: With the introduction of CFPB’s Loan Estimate and Closing Estimate, some of the information below may not apply if your loan application was originated October 3, 2015 or later as the 2010 Good Faith Estimate and HUD-1 Settlement Statement have been retired. Watch for an updated post soon!  Click here for the updated post.

When I originally wrote this post back in January 2007, we didn’t have the Good Faith Estimate that HUD created and implemented in 2010. Although this GFE has caused greater confusion and has overall been a failure (a new version is should be available in 2012), the one positive feature about the 2010 GFE is that lenders are bound by what they quoted on their last Good Faith and page three of the HUD-1 Settlement Statement clearly compares what was quoted by the Mortgage Originator and what the final fee at signing is. In addition, there are certain tolerances that limit how much more a fee at closing can be for some of the lender fees.

[Read more…]

What’s Moving Mortgage Rates, November Holidays and More!

Europe continues to impact our markets as we watch the drama in Greece and Italy continue to unfold. It's amazing to some that something that is happening so far away may impact your mortgage rates. This is because mortgage rates are based on mortgage backed securities (bonds) and investors will either seek the safety of bonds over stocks when stocks are deteriorating or will opt for stocks and sell bonds when a better return is available. Basically, bad economic news tends to be good for mortgage rates (not so good for our retirement accounts) and good news, as well as inflationary data, tends tends to drive mortgage rates higher. 

This afternoon, we'll have the results of a $32B auction of 3-year Treasury Notes.  We don't have any major economic reports scheduled to be released until Thursday, November 10th, with the weekly Initial Jobless Claims. On Friday, we have Consumer Sentiment from the University of Michigan.  On Friday, the bond markets will be closed in observance of Veterans Day.

Something else to keep in mind with November is that it is a shorter month as we are beginning "the holiday season". Some of these holidays may impact your refinance waiting periods or when you may be able to close.

Friday, November 11, 2011 is Veterans Day.  Veteran’s Day is a federal holiday, therefore, this date cannot be included when counting the waiting period for rescissions for refi's, MDIA (initial waiting period and re-disclosure waiting period) or HVCC.  In addition, this date is not counted in the 3 day disclosure requirement for initial disclosures or re-disclosures.  Banks, county courthouses, and Mortgage Master Service Corporation will be closed for business on Friday, 11/11/11.

Thursday, November 24, 2011 (Thanksgiving):  Thanksgiving is a federal holiday, therefore, this date cannot be included when counting the waiting period for rescissions, MDIA (initial waiting period and re-disclosure waiting period) or HVCC.  In addition, this date is not counted in the 3 day disclosure requirement for initial disclosures or re-disclosures.  Banks, the post office, the county courthouses, and Mortgage Master Service Corporation will be closed for business on Thursday, 11/24/11.

Friday, November 25,2011:  This is NOT a federal holiday.  While courthouses and Mortgage Master Service Corporation are closed, this date can be included in the waiting period for rescissions, MDIA (initial waiting period and re-disclosure waiting period) or HVCC.  In addition, this date is counted in the 3 day disclosure requirement for initial disclosures or re-disclosures.

Also in November… 

In a few weeks we should have more details about HARP 2.0 and learn what 2012's loan limits will be for Conforming and FHA loans.  And hopefully this month, there will be decision on the VA funding fee, which was earlier reduced and then retracted. It's quite possible that conforming and FHA loan limits may be reduced further – we really have no idea what Congress is going to agree on at this time.  Currently the conforming and FHA loan limits in King, Pierce and Snohomish County is $506,000 (reduced from $567,500 on October 1, 2011).   If you have a "high balance" loan amount and are considering refinancing or buying, you may be gambling becoming a "jumbo loan" with each day you wait.  

If you have questions or need help with a mortgage on a home located anywhere in Washington, please contact me.  I am a Licensed Mortgage Originator who not only provides information to consumers via my blog, I help people with homes in Seattle, Redmond, Tacoma, Everett and beyond with their refinance and home purchase mortgage needs. I also adopt mortgages. If you haven't heard from your mortgage originator in the last six months, it's quite possible they are either no longer licensed or may have chosen another career. If your home is in Washington, and you would like to be treated like one of my clients (added to may mailing list, receive updates and a review of your current mortgage – no refinance or new mortgage is required) please contact me.

It’s time for HUD to revamp the FHA Streamlined Refi

HUDHUD's Shaun Donovan was recently promoting Obama's jobs bill and the recently revised the Home Affordable Refinance (aka HARP 2.0).  Fannie and Freddie have revamped the Home Affordable Program to reduce the closing cost and eliminate the need for an appraisal on many qualified homes.

From Donovan last week on HARP for conventional refinances:

"…There are still millions of Americans who have worked hard and acted responsibly, paying their mortgage payments on time. But because their homes are worth less than they owe on their mortgage, they can’t refinance….

Just yesterday, the FHFA announced changes that will help more responsible borrowers take advantage of today’s low mortgage rates. These changes will knock down barriers such as closing costs and fees that can sometimes cancel out the benefit of refinancing altogether.

And by creating more competition so that consumers can shop around for the best rates, these changes will save homeowners on average $2,500 per year — that’s the equivalent of a pretty good-sized tax cut…"

With HUD promoting HARP 2.0, I'm hoping that they're taking a strong look at their own FHA Streamlined refinance.  FHA streamlined refi's already do not require an appraisal as long as the loan amount is not being raised over the balance of the existing FHA loan.  

The problem with the FHA streamlined refinance is that with the last adjustment to FHA's annual mortgage insurance and funding fee, it's more difficult to have these refi's pencil out. The annual premiums are so much higher than past insurance premiums that despite today's much lower rates, the higher insurance fees often cancel out the reduced rate benefit. Seattle area and other home owners who are not underwater with their home values may be able to switch to a conventional mortgage (with or without private mortgage insurance depending on the loan to value) and an appraisal will be required to prove the current value of the property.

In my opinion, with FHA streamlined refi's, HUD should either allow a reduced mortgage insurance rate for streamlined refi's and perhaps not offer a credit of the remaining upfront mortgage insurance premium. VA's IRRL loans offer a reduced funding fee of 0.5% for refi's.

Another option would be for HUD to allow the FHA borrower to refinance their FHA mortgage with the same FHA mortgage insurance premiums of their current FHA loan.  

HUD should also make it easier for borrowers with FHA ARM's to be able to do a streamlined refi into a fixed rate program.  Current guidelines require a reduction in payment of 5% and a caps the interest rate at no more than 2% higher than the ARM. If the borrower qualifies for the higher payment and they are opting for a fixed rate program, they should be allowed to do so.  Currently this eliminates borrowers from being able to streamline refi from an adjustable rate to a 15 year fixed.

HUD already has the risk with the loan, why not help Americans with FHA insured loans reduce take advantage of this current low rate environment by making FHA streamlined refinances more feasible? 

Mr. Donovan, it's time for HUD to knock down barriers such as closing costs and fees that can sometimes cancel out the benefit of refinancing altogether for FHA streamlined refinances.

EDITORS NOTE: This post was updated 11/21/2011 with the addition of the paragraph addressing changing the requirement for a steamline refinance out of an adjustable rate.