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

October 17, 2011 by Leave a Comment

rate quote timerWhen 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 recent a quoted mortgage rate is, the better odds you have of it being reliable.

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How long does a mortgage rate quote last?

September 6, 2011 by Leave a Comment

When checking around for who has “the best mortgage rate” or just getting an idea of what mortgage rate you may qualify for based on your personal scenario, many will obtain a “mortgage rate quote“.  Mortgage rates change constantly, similar to the stock market, as they’re based on mortgage backed securities (bonds).

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My Online Resume

September 4, 2011 by Leave a Comment

I love social media and technology. Here's a quick presentation I created using powerpoint and slideshare. Let me know what you think!

 

Rhonda Porter | Washington State Mortgage Originator

 

Filed Under: Interest Rates

Mind the Gap: High Balance Loan Amounts are Running Out of Time

August 25, 2011 by Leave a Comment

Mindthegap Conforming and FHA high balance loan limits set to be reduced effective October 1, 2011.  Banks and lenders have different cut-off dates in order to assure they're able to deliver loans without being stuck with a "jumbo" loan priced at a conforming rate. 

If mortgage transactions are currently taking 30 days to close and mortgage companies are setting their own deadlines to make sure they can deliver before time runs out, borrowers need to act fast IF their loan amount is in the gap between the current and reduced limits.  In King, Snohomish and Pierce Counties, loan amounts between $506,001 and $567,500 for single family dwellings will be impacted by reduced loan limits.  This post I wrote a few weeks ago contains a complete list of reduced loan limits for conforming and FHA mortgages by county in Washington.

If you are refinancing or buying a home and your loan amount is "in the gap" between current and pending loan limits AND you're closing in late September, contact your mortgage originator as soon as possible to make sure that everything is in place so that your transaction closes in time (which may require closing prior to September 30 depending on your lender's guidelines).  Be aware that you will most likely NOT be able to extend your rate lock commitments at the end of September if the loan amounts are in "the gap" range.

Mind the gap!

If you would like me to provide you a mortgage rate quote for your home located anywhere in Washington, click here.

 

Filed Under: Interest Rates

Chasing Last Week’s Mortgage Rates | How Rates Change

August 23, 2011 by Leave a Comment

Yesterday, a Seattle area homeowner I’ve been providing rate quotes to told me they’d like to lock if they could have the rate quote I provided him last week when mortgage rates were at an all time low.  Six months ago, there would be a greater possibility that I would be able to offer her the same rate at the same price as last week prior to the Fed’s ruling on how mortgage originators are compensated (referred to as LO Comp).

LO Comp has done two things:

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Filed Under: Interest Rates, Refinance Tagged With: ,

Using Rebate Pricing to Reduce Closing Cost on your Refi or Home Purchase

August 21, 2011 by 6 Comments

Mortgage rates are priced with rebate, a credit towards closing cost, or discount points, an additional cost paid to reduce the interest rate (Note rate).  The amount of the rebate or discount is based on a percentage of the loan amount. The difference in pricing (rebate or credit) varies throughout the day, just as mortgage interest rates change. In fact, it’s not so much that the mortgage rates change throughout the day, it’s actually the cost or credit associated with that rate.

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Make Sure Your Loan is Locked

August 19, 2011 by Leave a Comment

I’m taking a few days off and thought I’d share an post I wrote a few years ago (April 2008) at Rain City Guide.  It’s interesting how much higher the rates were back then. You can read the original post here. 

I’ve been communicating with a home owner who thought their loan was locked in at a certain rate only to learn that this is not the case.   Here’s their story:

Their existing ARM reset in March.   In late February, they informed the LO they wanted to lock at  5.5%, no points, 30 year fixed, and close before April 1 and the LO said it was reasonable and doable.  The appraisal was complete in late March with a LTV 79%.  The LO did not lock in at that time.   The LO presented a GFE 55 days after the application was signed and not the program that was agreed on…the LO admits he dropped the ball but cannot fix it with his bank.

Ouch.  Big ouch. 
Part of the problem that I can see by reviewing rates I’ve posted is that in late February (at least on Fridays) rates where in the high 5’s with 1 point.  So a borrower could easily tell a Loan Originator, “this” is the rate I want you to lock me in at…and if that rate does not happen at that time, the LO will most likely not lock the borrower since this is what the borrower has instructed the LO to do.
 
For the LO to tell these borrowers “reasonable and doable” was a stretch. Reasonable, maybe but in this current market when we’re averaging two rate sheets/changes a day: almost anything and nothing may be reasonable and who’s to say what’s doable unless you’re the dough fronting the mortgage.  The appraisal should not have been ordered without the borrowers consent.  The LO could have easily told the borrowers, your rate has not become available, should we order the appraisal (worse case, borrower is out a couple hundred dollars) or would you like to wait to see if your rate becomes available?   The Good Faith Estimate being presented almost two months of application is inexcusable.  
Hindsight is so clear and you can see the warning signs about this transaction skidding down the wrong track. So what can you do to try to make sure your loan is actually locked?
 
Obtain a written Lock Confirmation.   Your lock confirmation is not a guarantee.  I’m sorry…I wish it were.  If the information you provided on your application, your credit scores change (expired credit report), the appraisal comes in lower; may impact your interest rate and thus the lock.   Once you request a lock from your LO, or they say your locked, get it in writing!   If you don’t receive a Lock Confirmation by the following day, contact your Loan Originator to find out when you will have one. 
 
I have recommended that this couple contact the LO’s supervisor…but here’s the challenge:
 
If the LO told them they were indeed locked, the bank might try to honor (eat) the lock, as they should.  Based on today’s pricing, buying that rate would cost an additional 2 points.  However, without documentation of any sort (no email or lock confirmation), it will be challenging to prove that the LO promised or committed to this rate.  It’s your word against theirs.   If the borrower stated, I want “x” rate at “y” cost and these factors never happened…the Loan Originator is off the hook.  The LO cannot provide what is not available (specific rate/cost).   It’s an expensive lesson.
 
But what if the borrowers rate/cost was available and the LO committed to locking in that rate?  Mind you, rates can and do change even while they’re being locked–which is very frustrating.  In that case, the LO should contact the borrower immediately to let them know there’s been a change for better or worse (usually better is no problem).   Again, assuming the rates available and the LO either screws up and doesn’t lock the rate or tells the borrower it’s locked when in reality the LO is “gambling” the market.   What can the consumer do if they discover their rate was never locked?  I contacted fellow RCG contributor and attorney, Craig Blackmon regarding if there’s any recourse for someone with an unhonored written lock confirmation (assuming the program is still available and the other factors I mentioned above that may impact a lock):
 
Here’s Craig’s answer:
 
That would depend on the “written lock confirmation.”  If that document constitutes a binding contract, then yes the borrower would have a breach of contract claim against the party to the contract for the difference between the promised rate and the actual rate.  Even if the document does not constitute a contract, the borrower might still have a negligence claim (i.e. a malpractice claim) against the LO if the LO failed to exercise a reasonable degree of skill and care in attempting to lock in at the promised rate.  In either event, the borrower’s recourse would be against the LO (I think — again, I would need to see the “confirmation” to confirm in regards to the breach of contract claim).  
Bottom line, be sure to get documentation of your lock in writing.   Lenders should provide lock confirmations with an updated Good Faith Estimate if the rate or cost have changed from the last one provided.  If something smells fishy and they’re no cooperating or stalling, it’s probably shark.  Oh…and last but not least, I don’t recommend chasing a rate.  If you like the rate, lock it or be prepared to lose it.
 
UPDATE AUGUST 2011:  Once a good faith estimate is issued (since 2010), a bona fide “changed circumstance” is required before a loan officer can reissue or update it…locking your loan (going from a float to a lock) is considered a “changed circumstance” and if a Good Faith Estimate has not been issued, one is required within 3 days.  
Filed Under: Interest Rates Tagged With:

Plenty of Economic Reports On-Deck this Week

August 1, 2011 by Leave a Comment

mortgageporter-economyAs if waiting to see whether or not our elected officials in Congress can agree on a plan addressing our debt issues, we have several economic indicators scheduled to be released this week that have historically impacted the direction of mortgage interest rates.  The DOW started off very positive (up 139) anticipating a deal had been reached, only to dramatically tank when the lowest ISM Manufacturing figures in two years were released this morning.  The market has been very volatile and remember, “typically” when the stock market is tanking, mortgage rates tend to improve as investors will trade stocks for the safety of bonds (like mortgage backed securities). The reverse is also true.

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Filed Under: Economy, Interest Rates
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