Archives for March 2013

How does a Loan Mod impact buying your next home?

Many home owners who were unable to refinance and did not qualify for special programs like HARP opted for a loan modification (or loan mod). A loan mod is when the existing mortgage terms are adjusted or modified, in most often cases to reduce the mortgage payment.

To be clear, I am not in the “loan mod” part of the mortgage industry. My focus is on helping Washington home buyers and home owners with mortgages for purchasing a home or refinancing their mortgage.  With my mortgage practice, I do come across home owners who have had a loan mod and they are often surprised to learn how it may impact their odds buying a home. 

Many lenders view a loan modification, if done for reasons of financial distress, as a “pre-foreclosure” or short sale.

A lot will weigh on the borrowers credit report. Lenders will look to see how the loan mod was reported to the bureaus. For example, some lenders may have added language to the credit report such as “PAYING UNDER PARTIAL AGREEMENT” or “LOAN MODIFIED…” which indicates a loan modification has taken place. Lenders will weigh if the borrower had late mortgage payments, how late the payments were and how recent the last late payment took place. 

It’s also possible that the loan mod may not prevent you from buying your next home depending on your circumstances and how the loan mod was reported to the bureaus.

If you’ve had a loan modification in the past few years and are considering buying your next home, you will want to connect with a mortgage professional as soon as possible to see what your options are. 

If you are considering a loan mod, please review this information from Washington State DFI. Another great website for you to check out if you are a Washington state homeowner in distress is

If you are considering buying a home located in Washington state, I’m happy to help you. Worse case, if you are not able to “buy now” we can work on a plan together so that you’ll be in a better position in the future.

Seller’s Guide to Today’s Mortgages Guide Book

 My most recent book that I’ve published is not for home buyers. I wrote this book for home sellers.

Mortgages have changed so much in the last few years and it’s my hope that this latest Guide Book will provide home sellers with information so they can make an informed decision when selecting a potential buyer for their home.

This book includes information on various mortgage programs, such as how much a seller can contribute towards closing cost, reviewing preapproval letters and basic guidelines.

If you’re considering selling a home located in Washington state, I hope you’ll take a moment to check out my latest Guide Book.  

Update on USDA Zero Down Rural Home Loan Program

USDA mortgages offers home buyers the opportunity to buy a home in a designated rural area with zero down payment. Area’s outside of the peach colored area in this map may be eligible for USDA zero down financing.

This program is available to borrowers who meet certain income limitations. Currently in the King County area, a household with 1 to 4 family members may qualify if their household income is $93,450 or less and $123,350 or less for households with 5 to 8 family members.

Home buyers in USDA desginated rural areas like Maltby, Vashon Island and Snoqualmie, who are depending on zero down financing have been caught in limbo with the future of the program in question. It looks like this uncertainty may almost be over.

Last week, the Senate and House approved FY 2013 Continuing Resolution which, among other things, would allow USDA loans to continue through September 2013 to current designated rural areas.

The bill awaits President Obama’s signature.

Meanwhile, we have been told by our USDA lenders that it is “business as usual” and we continue to offer this program to qualified home buyers and home owners wanting to refinance their existing USDA mortgages.

If you are interested in a mortgage rate quote for a USDA zero down loan or other mortgage programs for homes located in Washington, click here, I’m happy to help you!

Mortgage Rate update for the week of March 25, 2013

There are no economic indicators scheduled to be released today. What is impacting the direction of mortgage rates this morning is the small European country of Cypress. Banks are re-opening tomorrow and it’s widely expected that there will be a run on the Cypress savings accounts because of the tax that is being imposed on the citizens. The markets fear that this may spread to other countries in Europe.

Here are a few of the economic indicators scheduled for this week:

  • Tuesday, March 26: Durable Goods Orders; S&P Case-Shiller Home Price Index; Consumer Confidence; New Home Sales
  • Wednesday, March 27: Pending Home Sales
  • Thursday, March 28: Initial Jobless Claims; Gross Domestic Product (GDP); Chicago PMI
  • Friday, March 29: Personal Income and Personal Consumption Expenditures (PCE); Consumer Sentiment Index (UoM)

The bond market will close early on Thursday to begin the holiday weekend.  

As I write this post (7:40 am 3/25/23) the DOW is down 16 at 14495. MBS (mortgage backed securities) is sligh up 3 bps.

This is also your last week to get a new FHA loan with current reduced mortgage insurance premiums. Effective with new FHA case numbers issued April 1, 2013 or later, FHA annual mortgage insurance premiums are going up. If you have an FHA loan that is in process with a mortgage company, contact your mortgage originator and make sure they have your case number. 

If you are considering buying or refinancing a home located anywhere in Washington, I’m happy to help you! Click here if you would like me to provide you with a mortgage rate quote based on your personal scenario.

Buying Your First Investment Property Guide Book

This is my first “book release”…okay… it’s an “electronic book” or what I refer to as a “guide book”. I plan on writing several books on mortgage related topics.  This book happens to be about buying your first investment property. 

Although the book is focused on first time home buyers, the information also applies to investors who are buying their second or third investment property.

Watch for more topics to follow soon! You can find this and other slide books at the Mortgage Porter Library.

And the Fed Says…

Today wraps up the two day FOMC meeting with the Fed statement due around 11:00 am PST followed by a press conference featuring none other than Ben Bernanke. A change to the Fed Funds rate is not anticipated. Investors will be parsing through the press release and what the Fed Chair has to say about quantitative easing. The Fed has been hands on with keeping mortgage rates at artificial lows with their purchase of mortgage backed securities.

As I write this post (7:30 am on March 20, 2013) the DOW is up  75 bps at 14531 and MBS are down about 19 bps. 

3.625% for a 30 year fixed rate (apr 3.730) is priced with 0.479 in discount points for a 45 day lock. 

Stay tuned – I’ll try to do an update to this post throughout the day and we’ll see if what the Fed says influences mortgage rates today.

UPDATE: No surprises here. The Fed leaves rates unchanged and plan to continue to manipulate mortgage rates until unemployment improves.  From the FOMC statement:

To support a stronger economic recovery and to help ensure that inflation, over time, is at the rate most consistent with its dual mandate, the Committee decided to continue purchasing additional agency mortgage-backed securities at a pace of $40 billion per month and longer-term Treasury securities at a pace of $45 billion per month. The Committee is maintaining its existing policy of reinvesting principal payments from its holdings of agency debt and agency mortgage-backed securities in agency mortgage-backed securities and of rolling over maturing Treasury securities at auction. Taken together, these actions should maintain downward pressure on longer-term interest rates, support mortgage markets, and help to make broader financial conditions more accommodative.

The Committee will closely monitor incoming information on economic and financial developments in coming months. The Committee will continue its purchases of Treasury and agency mortgage-backed securities, and employ its other policy tools as appropriate, until the outlook for the labor market has improved substantially in a context of price stability. In determining the size, pace, and composition of its asset purchases, the Committee will continue to take appropriate account of the likely efficacy and costs of such purchases as well as the extent of progress toward its economic objectives.

As of 11:27 the DOW is up almost 85 points and MBS are down about 15 bps. No significant change since this morning.

12:55 pm: MBS down 37 points.

No Fooling! Time’s Running Out on Reduced FHA Mortgage Insurance Premiums

There are just a few days left before FHA mortgages will have another increase to annual mortgage insurance premiums. Effective with case numbers issued April 1, 2013 and later, FHA annual mortgage insurance premiums will adjust an additional 10 bps to 15 bps.

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Mortgage Rate Update for the Week of March 18, 2013

mortgageporter-economyThis morning, mortgage rates are improving largely due to drama that’s taking place in Europe with the IMF and the island of Cypress. The IMF is taxing (some say stealing) from depositors causing a run on the banks.

Remember, mortgage rates are based on mortgage backed securities (bonds). And when investors will seek the safety of bonds over the potential higher return found with stocks, causing mortgage rates to improve.

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