December 23, 2009 – Snohomish County closing early at 3:30 pm

December 24, 2009 – King and Snohomish County closed.

December 25, 2009 – Christmas (all offices closed)

Just a reminder to set your clocks back one hour when you go to bed tonight…or you can be official and roll your clocks back at 2 a.m. on Sunday, November 1, 2009.

Daylight saving time is over after this evening.

Last night, I received this email from a borrower who's dealing with yesterday's dramatic rise in mortgage rates:

I was wondering if there was anything we can do if we asked our lender to lock in Monday (which I would suppose would mean Tuesday am) and he didn't because he was sick.  Now he is balking at giving us the rate that he quoted us.  We think that the lending institution should make good on their rate, since we HAD decided to lock in and it was their delay that caused the problem.  Is there a chance for us? 

Monday was Memorial Day and therefore, the mortgage originator probably could not lock and most likely was enjoying a day off.   On Tuesday, it sounds like the loan officer took another day off for health reasons. 

Unless the mortgage originator provided you a written lock confirmation, I'm not sure that you have a leg to stand on.   A rate quote is not a guarantee of rate.  In fact, it's only valid the moment the loan originator is providing it.  Rates change constantly–yesterday, most of the lenders our company works with issued 5 different rate sheets. 

Not being able to reach your loan officer when you want to lock is a risk when floating your mortgage interest rate.  If I have the day off (due to health or vacation) I do have a manager who will take care of locks and/or any issues that may arise.   Consumers may also find it difficult to make contact with their mortgage professional to lock because they may be working with another client at the moment (either locking another loan or in a consultation).  

Not locking your rate at application (if you're closing soon) is gambling the rate not only are your betting that rates will go down, you're risking not being able to lock for the reasons mentioned above and also with constant changing guidelines in this current environment.  Locking the rate is also a form of gambling (that the rate will go up).   Always consider which worse case scenario you can live with when making the decision to lock or not lock.

With that said, rates may come back down since the Treasury is not done spending their allotment towards mortgage bonds (which has been keeping mortgage rates artificially low).  No one can say precisely when this will happen or how much rates will be manipulated lower.  

I just read this letter from the National Association of Mortgage Brokers which, for the most part, I find spot on.  This industry is in jeopardy of ceasing to exist with the latest actions of some private mortgage insurance companies and banks.  I work for a Correspondent Lender which is treated slightly better than a classic Mortgage Broker because we have "more skin in the game"…correspondents take the credit risk for the file.  However, I do not want to see my mortgage broker brothers and sisters ran out of this industry.  Competition is good for consumers.  It helps to keep your rates and costs down.  If we wind up with just a couple mega banks for mortgages, you can bet that the consumer will suffer.

Mortgage brokers have been wrongly blamed by banks and the media either intentionally or by misuse of words ("mortgage originator" would be more correct than mortgage broker).

Here are some points from Marc Savitt's letter:

• Mortgage brokers have never developed one single loan product or program.  However, some lenders and banks did, aided by Fannie Mae, Freddie Mac and Wall Street. 
• Yield Spread Premium (YSP) has been vilified when it actually pays for closing costs.  Mortgage brokers are the only originators who have to disclose what funds are being received as rebate.  Mortgage bankers, correspondent lenders and credit unions do not. 
• Mortgage brokers are currently highly regulated.  Over the past two years, DFI has regulated mortgage brokers and correspondent lenders.  Mortgage bankers are not nearly as scrutinized in Washington State.  Consumers are probably safer working with a mortgage broker or correspondent lender that is regulated by DFI.

If you have ever had a mortgage and a mortgage broker or correspondent lender help you–please contact your elected officials in "the other Washington" and let them know.   YOU might save a crucial industry at a critical time.

SAVE OUR MORTGAGE BROKERS!

Mortgage Master is closed today in observance of President's Day.  We will reopen for business as usual on Tuesday, February 17, 2009.