Archives for April 2012

You Don’t Have to Wait Until June to Start Your FHA Streamlined Refi

If you currently have an FHA insured mortgage that was *guaranteed* prior to June 1, 2009, you may qualify for significantly reduced mortgage insurance premiums with an FHA streamlined refinance.  Effective June 11, 2012, HUD will offer the reduced premiums for those who meet HUD’s criteria. The good news is, if you qualify for the reduced premiums, you don’t have to wait to lock in today’s low rates – just do a longer lock!

Why HUD, in all their wisdom, used the date an FHA loan was guaranteed beats the heck out of me. This has nothing to do with when your FHA mortgage closed; it’s when HUD has insured the loan which often takes place weeks or even a few months after closing.

If you have been considering refinancing your FHA mortgage with an FHA streamlined refi, and you closed on your last FHA mortgage prior to June 1, 2009, you may want to check with a local lender to see when your current mortgage was endorsed.

If you’re one of the lucky ones, you can actually start your application now (click here to apply on line if your home is located in Washington) and wait until June 11, 2012 to order your FHA case number.  We can also watch rates to determine when to lock. The longer the lock period, the more the rate cost. You can see by the rates posted below –  locking now with an extended lock period looks pretty good!

NOTE: Rates quoted below are from April 2012 – for your current mortgage rate quote on Washington homes, click here.

Here’s are some scenario’s for FHA streamlined refinances based on rates as of the writing of the post (4/11/2012 12:45pm PST) and the borrower having mid-credit scores of 720 or higher in greater Seattle:

Base loan amount of $400,000 for a 30 year fixed rate mortgage:

FHA Streamlined Refi with existing mortgage NOT qualifying for the reduced mortgage insurance premiums (mortgage not guaranteed by May 31, 2009 or sooner by HUD):

3.750% (apr 4.743%) with a PIMI (principal, interest and mortgage insurance) payment of $2,298.06. 

FHA Streamlined refi (existing mortgage was guaranteed by HUD prior to June 1, 2009) with closing by June 18, 2012 (long enough time period to obtain the reduced mortgage insurance premiums):

3.750% (apr 4.141) PIMI payment of $2,034.45. You don’t have to wait to lock in today’s low rates!  This pricing is based on a 75 day lock – or you can start the process and lock in at anytime you choose as long as the lock period is beyond June 11, 2012.

This is especially huge for FHA Jumbo’s which are really being hit hard with the higher FHA mortgage insurance premiums. In the greater Seattle area, this impacts FHA loans with a base loan amount of $417,001 to $567,500.

Here’s how the payments compare for an FHA Jumbo with a base loan amount of $565,000 and 720 mid-credit scores: 

FHA Jumbo Streamlined refi where existing mortgage was guaranteed June 1, 2009 or later:

3.750% (apr 4.589) with a PIMI payment of $3,222.66.

NOTE: FHA annual mortgage insurance will increase again for high balance/jumbo FHA loans by an additional 0.25% effective June 11, 2012. This increase would cause our above scenario (if they waited until June 11, 2012 to get their case number) to have a PIMI of $3,339.38 (apr 4.732). If you fall into this category: FHA high balance (aka jumbo) guaranteed after May 31, 2009, you will want to obtain your FHA case number BEFORE June 11, 2012.

FHA Jumbo Streamlined refinance where the existing FHA mortgage was guaranteed May 31, 2009 or sooner priced with a 75 day lock to close after the FHA case number is obtained on June 11, 2012:

3.875% (apr 4.214) with a PIMI payment of 2,913.94.

Another reason to consider starting your application now is that it will allow you have time to review your credit. There may be small adjustments you can make that will improve your credit score and quite possibly your interest rate – the point is, you have some time to check it out and make sure you’re in the best position prior to closing. 

If your home is located anywhere in Washington state, and you’re considering an FHA streamlined (or any type of) refi, I’m happy to help you! 

You don’t have to wait to start your FHA streamlined refi and gamble rates going higher, unless you want to.

What May Move Mortgage Rates the week of April 9, 2012

mortgageporter-economyThis morning, mortgage rates are trending lower from Friday’s Jobs Report coming in with weaker than expected data. As I write this post (10:15 am) the DOW is down about 115.

Watch for possible signs of inflation this week, which may reverse the downward trend in rates, with the scheduled economic indicators referenced below:

Wednesday, April 11: Fed’s Beige Book

Thursday, April 12: Producer Price Index (PPI) and Initial Jobless Claims

Friday, April 13: Consumer Price Index (CPI) and Consumer Sentiment (UoM)

If you would like your personal rate quote for your Washington State home, click here.

Seattle Sunday Drive to Olympic Sculpture Park

Last week, on our anniversary, we decided to check out the Olympic Sculpture Park which is located in the heart of Seattle on Western Avenue.  2012-04-01 11.20.31

I’ve driven by this giant eraser numerous times but this was my first time to get a “close up” at the actual park.

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Probably my favorite part of the park was the metal tree. Even on a grey Seattle day, the shiny silver branches were striking.

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This photo reminds me of giant cargo ships.

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I’m probably more “traditional” when it comes to art. However, I enjoyed strolling through the park on partly sunny day to check out the creations in a natural urban setting.

View more of my photos of Seattle’s Olympic Sculpture Park here.

How often will I have to supply documentation for a mortgage?

OnionI've often thought that the loan process for a borrower is similar to peeling an onion. At the very beginning stages, when a borrower is considering obtaining a mortgage and they discuss their scenario with their mortgage originator, they appear to be a smooth, shiny Walla Walla Sweet. As the process continues, more layers are removed as documentation is provided. Sometimes when several layers have been peeled away, you no longer have an onion or at least, not the one you originally started with. It's crucial that a mortgage originator takes an in-depth interview with their clients before they enter into a transaction (purchase or refinance) to make sure as much their financial information has been addresses as possible. There may be a significant difference between how a borrower views their financial scenario and what their supporting income and asset documents tell to an underwriter. 

Here are some of the stages that a borrower can expect to have documentation requested by their mortgage professional:

Preapproval. A preapproval is different than a "prequalification". When you're preapproved, expect to provide income/employment and asset documentation to support the information you've provided to your mortgage originator. The items that are requested may be standard or specific if the mortgage originator used an "automated underwriting system" (AUS).  NOTE: if you have not provided any supporting documentation to your mortgage originator, you probably have not been "preapproved".  It's possible that if it's been a while since your mortgage was preapproved, you may need to provide additional information (recent paystubs or bank statements, for example) to update your preapproval.

Processing. Once you have a bona fide transaction, your loan application is "in process". At this time, my Processor will review my clients file with a fine tooth comb to see if there's anything I may have missed. It's possible at this stage, that a borrower may be asked to provide additional documentation. Depending on the loan program, sometimes longer time periods are required (30 days of most income documents or two months most recent paystubs, for example). This is also the stage when IRS tax transcripts are pulled (from your signed 4506T) which may also trigger questions and the need for additional documentation. Our goal is to provide a solid file to our underwriters so the end result is less "conditions". 

When your appraisal comes in you will be required to sign disclosures acknowledging you received a copy of your appraisal. By the time you're done autographing all of your paperwork required in a mortgage transaction, you may feel like a very popular rock star.

Underwriting. Once we have a complete loan package with all of the supporting documents, the file is submitted to our underwriting department. Once again, the transaction is being closely reviewed to make sure the documentation provided is in-line with the program guidelines and lender overlays. Once we have preliminary approval from underwriting, it's normal to have some "conditions" which typically means…yep, you guessed it, providing more documentation or writing a letter explaining a specific circumstance (LOE). 

There are primarily two types of conditions from underwriting:

  • Prior to Doc: these items must be provided before loan documents can be prepared.
  • Prior to Funding (or Closing): these items will not hold up your loan documents being prepared and can be provided prior to your loan closing.

Prior to funding, your employment is re-verified and a soft pull on your credit report may be done to verify you do not have any new debts and that you are still employed. If there are changes to your loan application (new debt or employment) be prepare to provide more documentation. If you've made changes to your application (debts, assets, income or employment) during the transaction – you must notify your mortgage originator. You're signing a "final" loan application at closing which needs to reflect your financial scenario – if it does not, you may potentially be commiting fraud. In addition, when changes to an application are found at this late stage in the transaction, it's probable the closing will be delayed.

Every time a document is provided to underwriting for review, it's possible it may trigger a new condition.  For example, a bank statement may disclose large deposits, which will need to documented where the source of funds came from or it may show the borrower has bounced checks, which could require a written letter explaining why the NSF happened. 

Why all this documentation? Basically, it's thanks to recent years past with the mortgage meltdown and fraud. Providing everything that is requested by your mortgage professional will help expedite your transaction. 

The days of "stated income" loans are gone. There are some streamlined mortgages that allow for less documentation, such as an FHA streamlined refinance and HARP, depending on the automated underwriting response from Fannie or Freddie.   

If you're interested in getting preapproved for a mortgage for a home located anywhere in Washington State, I'm happy to help you. I have been helping Washington home owners at Mortgage Master Service Corporation buy and refinance since 2000.

Photo Credit: Doc Wert via Flickr

What are your odds of getting a HARP 2.0 refinance?

UPDATE SEPTEMBER 4, 2012: Odds are back to being a little tricky if you have a Freddie Mac securitized mortgage….bummer!  Most of my lenders are limiting us to 105% LTV for Freddie Mac and unlimited LTVs for Fannie Mae.

UPDATE MAY 12, 2012: ODDS ARE GREATLY IMPROVED!  We are now working with several lenders who are allowing expanded (unlimited) loan to values, including mortgages with existing private mortgage insurance and lpmi (as long as the mortgage insurance can  be transferred).  For a quote on a HARP 2.0 refi for your home located in Washington, please contact me.

Many home owners who have been patiently waiting for the expanded guidelines offered with HARP 2 to become available have found frustration. I’m being told that we are going to have the ability to originate HARP mortgages for my clients beyond 105% loan to value “soon” but as of the publishing of this post, I’m still limited to 105% LTV based on Fannie or Freddie’s estimated value of your home.  


UPDATE 4/19/2012: Mortgage Master Service Corporation is adding several lenders who are allowing us to do unlimited loan to values! Stay tuned – I’ll have an exciting announcement soon!  


Click here for your rate quote for your home located anywhere in Washington.

HARP 2 is the Home Affordable Refinance Program which is available to home owners who have their mortgage *securitized by Fannie Mae or Freddie Mac prior to June 1, 2009.  *NOTE: this is different than who you make your mortgage payment to (your mortgage servicer).

This program is intended to be a giant band-aid with our housing by allowing qualifed home owners to refinance their underwater mortgages, reducing their mortgage payment and/or term and hopefully stimulating the economy with the extra cash flow. Many are supposed to qualify without having an appraisal – it’s intended to be a streamlined process. It is streamlined and available…for some. For many it may feel like throwing spaghetti on the wall to see what sticks.

What are your odds of obtaining a HARP 2 refinance? It depends on what your scenario looks like. I’ve successfully closed many HARP 2 refinances without (and with) appraisals for both Freddie Mac and Fannie Mae securitized loans. Here’s what I can tell you now (remember, this is my opinion and subject to change…hopefully soon). This is not intended to discourage you from trying to obtain your HARP 2 refinance.

Your odds are strongly in your favor if your loan to value on your first mortgage is 105% or lower and if you do not have any private mortgage insurance. Zillow has seemed to be fairly accurate for estimating value. However the ultimate say on if the value is acceptable to create an “appraisal waiver” is Fannie Mae and Freddie Mac.

Your odds improve more if your mortgage is securitized by Fannie. Freddie seems to be a bit pickier with approvals and sensitve towards new debts or debt to income ratios. 

Second mortgages or HELOCs have not been a huge issue [knock on wood]. Most second lien holders have been cooperative and agreeing to subordinate their lien position – even without an appraisal.

Private mortgage insurance is still not where it needs to be with the HARP program. If you have any type of private mortgage insurance, this is an additonal “layer” to work with for your loan approval. The pmi company needs to agree to have the insurance transferred to the new loan and the new lender needs to accept the new pmi.  With pmi, your coverage amount will stay the same AND private mortgage insurance companies treat the transferred coverage as a “new loan” (you may be stuck with that pmi for a while on a new HARP loan).  Your odds are better with pmi if your loan to value is 95% or lower.

UPDATE 5/12/2012: HARP 2.0 mortgages with private mortgage insurance are not as much of an issue as long as the existing private mortgage insurance can be transferred or if the lpmi can be converted to borrower paid mortgage insurance. Most private mortgage insurance companies are agreeable and we work with lenders who are accepting transferred mortgage insurance. 

Odds are worse if your the company who holds your pmi is United Guarantee. UGIC is not cooperating as much as the other pmi companies. UGIC is participating in HARP, however they are not waiving the reps and warrants on the original file. Therefore they request and require the original package from the current mortgage servicer and it takes a lot longer than the other MI companies.

Current odds are [NOT] lower if you have LPMI (lender paid mortgage insurance). Your best bet may be to try your existing mortgage servicer to see if they can help you with your HARP 2 refi. It’s my understanding, some mortgage servicers are refusing to help their very own clients with this program.  Depending on the type of lender paid mortgage insurance (how the premium was structured) it may be fairly simple to help you with HARP 2.0.  Just like regular pmi, as long as the private mortgage insurance company allows it to be transferred and be “borrower paid” (some lpmi loans can be coverted to bpmi – borrower paid), we have lenders who will accept the pmi. YOU DO NOT HAVE TO GO BACK TO YOUR BANK OR MORTGAGE SERVICER WITH AN LPMI HARP 2.0 REFINANCE.

Again, I looking forward to sharing with you that I have unlimited LTVs and can help any Washington borrower who has pmi or lpmi but it’s just not the case “right now”. We are working on bringing on more lenders who may allow expanded guidelines that other banks seem to be restricting. Currently, I can help most borrowers who need a HARP 2 refi as long as the loan to value doesn’t exceed 105% per Fannie Mae or Freddie Mac’s estimated value of your Washington home.  UPDATE 5/12/2012: With the lenders we now work with, we have no loan to value restrictions for Fannie or Freddie and pmi or lpmi is probably not an issue. 

It’s very frustrating to see the overlays banks and mortgage servicers have put on the HARP 2. Banks are limiting the availability of a program that is designed to help stabilize housing and the economy. This needs to change. HARP needs to be widely available to all home owners who qualify. 

I’m happy to review your HARP 2 scenario for your home located any where in Washington. I have successfully helped many home owners refinance with the Home Affordable Refinance Program, including investment properties and second homes. 

If you would like me to provide a rate quote for your HARP 2 refinance, click here.

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 or

What may impact mortgage rates this week: April 2 – April 7, 2012

2015-04-01_0922If you’re one of my long time readers, you probably know that April Fools is an extra special day for me. Not only is it the day I my husband and I married six years ago, it also marks the day that I began my mortgage career at Mortgage Master Service Corporation back in 2000. Yesterday we celebrated our happy anniversaries with a walk through Sculpture Park in Seattle, lunch at Latona Pub (seriously the best hamburgers in Seattle) and a stop at Daniel Smith’s to pick up some more paint and supplies during their clearance sale…and wrote a preapproval letter for a couple who are getting ready to buy their first home using an FHA insured mortgage.

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