New Mortgage Porter Poll: Do You Care Who Your Mortgage Company Is?

March 1, 2008 by 7 Comments

As a Correspondent Lender, we work with just about ever bank and some lenders you may not have heard from.   Every so often, I’ll have a client request a specific bank.  The conversation may go something along the lines of:

Client:  Can you please lock my loan at Wells Fargo (or Washington Mutual, Countrywide, etc.)?

Me:  We work with many banks.  However, I usually select by who is offering the best rate or best product for your scenario.

Usually the client is fine with getting the best rate or product.  Sometimes, they may request to not be locked with a certain lender due to a bad previous experience.   I’ll advise the client that I won’t lock them at that specific bank; however, I cannot guarantee they won’t wind up at that bank since mortgages are often transfered.   The request to be with a specific bank has really dwindled lately.  I’m assuming clients are happy to have qualified for a mortgage with today’s tightened guidelines and to have secured a low rate.

I have been wondering…does a potential borrower care if they found out their mortgage was locked in (brokered) with a specific lender?

Would it matter to you if I lock your mortgage with Countrywide, WaMU, IndyMac, Wells Fargo, Chase, Flagstar, Wachovia or DiTech?  (Note: these banks are mentioned in no specific order and does not represent a complete list of lenders we work with).   How about a bank you’ve never heard of before?   Or if the bank was a "subprime lender" yet they offered a lower rate than a prime lender?

Voila, we have our first poll at Mortgage Porter on the right side of this page.  Please vote! 

Update:  I will keep this poll available until March 8, 2008.

Pole Results:

  1. Yes. There are banks I don’t want to support. (8)
  2. No. I don’t care. I just want the lowest rate. (8)
  3. It doesn’t matter (4)
Filed Under: Mortgage, Polls

Do I Actually Have Clients?

February 28, 2008 by Leave a Comment

Welcome

I just received this question from a Mortgage Porter reader:

"I’m looking for licensed, local quotes to refinance my house. My ARM is ending and I’ve been entertaining quotes from contractors to redo my kitchen this Spring. Do you actually have clients or just an advice website?"

I’m really glad she asked this question.  Mortgage Porter is web-blog where I dish out my 2 cents on the mortgage industry and what ever advice I may have.   You may notice that I do not have any advertisements on this blog as many other blogs do.  It’s tempting…but I’ve steered clear of google ads and offers from various vendors.

My sole source of income is the origination of mortgages for those I assist with their financial plans.  My clients are the fine folks who with residential property anywhere in Washington State.  If your property is outside of Washington, I cannot provide your mortgage (I’m only licensed for Washington) however, I will try to find a Mortgage Professional who can assist you.

A majority of my clients are either returning clients whom I’ve helped before, referred to me from past clients or professionals (real estate agents, CPAs, CFPs, etc.) and I also have clients who read Mortgage Porter and decide they would like me to help them with their mortgage needs too!   I do not "cold call" or buy leads.

I am a Licensed Loan Originator (510-LO-32047) with DFI and hold a CMPS (Certified Mortgage Planning Specialist) designation.

Sorry, too late for a quick answer:  Yes, I do have a mortgage practice and I welcome new clients.  You don’t even need to refi or to be buying a home to be my client.  I am "adopting clients" who have been abandoned by their loan originator as well. 

Thanks for asking!

Filed Under: Mortgage

Qualify a Loan Originator with this One Simple Question

February 27, 2008 by Leave a Comment

How do you track mortgage rates?

If the person who will potentially helping you obtain a mortgage answers:

“I get rate sheets in the morning and later if they change during the day.”

Run!  Anyone who is gauging interest rates by when lenders issue new rate sheets is behind the market.  The rates have all ready adjusted.

“I watch CNBC (or something along those lines) and keep tabs on how the 10 Year Note is performing.”

Wrong again.  Mortgage interest rates are not based on the 10 year note.  However you will hear the media and other professionals incorrectly state this is what rates are based on.  If you or your loan originator are tracking the 10 year based on when to lock, it will cost you.

The correct answer:

“I keep a close eye on mortgage backed securities.  I am committed to my mortgage practice and this is why I subscribe to a service (such as Mortgage Market Guide) which allows me to do so.”

Now here’s my question for you:

If you are working with a Loan Originator who is not dedicated to their practice enough to subscribe to a service that allows them to track mortgage backed securities or (even worse) who does not know or care to track what influences mortgage rates: WHY?

Filed Under: Interest Rates, Mortgage

Tomorrow Morning I’ll Either Look Like a Hero or a Zero

February 6, 2008 by 3 Comments

Hero

Just before 5 tonight I provided a Good Faith Estimate along with a Total Cost Analysis comparing four price points for a 30 year fixed rate purchase closing at the end of March.   You see most lenders are not allowing locks to take place “after hours”; you have to wait until the markets re-open in the morning.  This home buyer is still shopping rates with various lenders and so when she calls them tomorrow, my estimate is either going to look outstanding because rates have increased (and I won’t be able honor it since it’s not locked tonight) or I’m going to look like a mooch with higher rates because the market has improved.  Unless rates are unchanged, the rate on my good faith estimate is worthless.

[Read more…]

Filed Under: Interest Rates, Mortgage, Residential Purchase

Join the Mortgage Porter Rate Watch

February 2, 2008 by 2 Comments

UPDATE:  Sadly the service that I used to provide this (Mortgage Coach) no longer offers this program. HOWEVER, Mortgage Master Service Corporation has added a new program which watch mortgage rates and email an alert once we have reached your target rate.  I still adopt mortgages and help Washington home owners with refinances…I’m just not able to provide the report. 

A few months ago, I wrote about adopting mortgages for borrowers who have adjustable rate mortgages and who do not have a Mortgage Professional to assist them.  If you have not heard from your Loan Originator since your transaction closed, or even within the last few months, they either

  1. Are no longer in the mortgage industry originating mortgages, or
  2. Do not have a “post closing” system designed to help home owners stay informed about their mortgage, and
  3. Only care about originating and not what happens to borrowers afterwards.

Perhaps your Loan Originator has you on their mailing and email list and you’re just not that impressed with the level of service they offered you…you want to make a move.

Consider having your mortgage adopted by a Mortgage Professional you trust.  I personally enjoy adopting mortgages for Washington State families.   It’s a FREE service and more often than not, the current rate is fine for the family (no refinance is required).   At least the home owner knows that they have a Mortgage Professional who is watching out for them.   Refinancing a mortgage, when it makes sense, can save hundreds of dollars each month that can either be invested into savings, used to pay off debts or applied towards the principal of the new mortgage to shorten the term and reduce interest.  Bottom line, it saves home owners money and if the home owner is going to retain the mortgage long enough to break even, it’s almost crazy not to do it.   (It’s also crazy to refinance when their is no financial benefit).

I can tell many home owners do not have relationships with their loan originators because of the amount of rate quote request I receive from all over the country.  Currently, I can only help people with mortgages in Washington State (if you’re outside of Washington, I’m happy to refer you to fellow Mortgage Professionals).   

If you would like me to adopt your mortgage and add you to my rate watch, send me the following information:

  • Your Full Legal Name(s)
  • Property address
  • Estimated value of the property
  • Current mortgage balance(s)
  • Estimated credit score
  • Your email address/phone number (email is an excellent way for me to send a rate alert should mortgage interest rates drop)
  • How long you plan on keeping the property
  • Do you have taxes and insurance included in your mortgage payment

I will review your mortgage and send you a Personalized Mortgage Plan includGetthumbnailcak0vwpfing a  Total Cost Analysis which compares your existing mortgage to 3 other mortgage scenarios.   I just emailed one to a homeowner in Snoqualmie this morning showing him that he should not refinance at this time.

Again, there is no cost to you and no refinance required.  I’m happy to adopt your mortgage!

Filed Under: Financial Planning, Interest Rates, Mortgage, Refinance

A Jumbo Question: Conforming Loan Limits

January 31, 2008 by Leave a Comment

A Mortgage Porter reader asks a very timely question regarding the proposed conforming loan limit:

"I just spoke to one of the major lending institutions and he recommended that if I can wait 3 – 4 weeks we may see a change in the non conforming guidelines such as amount that is normally set t $417,000 jump to either $620,000 or $630,000. 

Would you have any information on these possible changes and time line?"

Many people are full of questions regarding what’s going on with the conforming loan limit.  Different figures and stats are being quoted from various sources.

The Certified Mortgage Planning Institute issued this statement yesterday:

CMPS Legislative Update – Higher loan limits inching toward reality!

Yesterday, the US House of Representatives overwhelmingly passed HR 5140 – an economic stimulus package that includes a temporary increase in the conforming loan limit and the upper threshold for FHA loan programs to as much as $729,750 in high-cost areas.  The temporary increase would last only until the end of 2008.  The bill would also restrict Fannie Mae, Freddie Mac and the Federal Housing Administration from guaranteeing or purchasing loans above 125 percent of the median home price for a given area.  That means that the existing $417,000 conforming loan limit for mortgages eligible for purchase by Fannie and Freddie would not increase in areas where the median home price is $333,600 or less.  The problem of course, is that as of right now, no one knows what the median home price is in different markets because this data has never been published by HUD!

Therefore, it would be up to the Secretary of Housing and Urban Development to determine the median home price for different housing markets "as soon as practicable," but no later than 30 days after passage of the bill, relying on existing commercial data where needed.  In other words, if median home prices in your marketplace are $336,000 or less, this bill won’t really affect you; and there’s no way to tell if median home prices in your area are higher than $336,000 until HUD publishes this data.  Nevertheless, jumbo relief is certainly on the way for places like California where median home prices are certain to be above $336,000.

Currently, the loan limit for FHA loan programs is between $200,160 and $362,790, depending on the county where the property is located.  The proposed higher limits for FHA loan guarantees are also set to expire at the end of this year, unless Congress passes other legislation intended to modernize FHA programs by introducing risk-based pricing and lowering down-payment requirements.

While House leaders thought they had reached an agreement with the Bush administration to include FHA modernization as part of the stimulus package, they agreed to continue working on that issue separately at the administration’s request, the Associated Press reported.

In order to make higher limits a reality, the next step is for the Senate to pass the bill and for the President to sign it into law.  The target date for final passage set by the White House and Congressional leaders is February 15, so let’s hope for the best and we’ll be sure to keep you posted as we have more information.

Sources and helpful links:

·          Inman News

·         HR 5140

·         FHA Loan Limit Search – (Current Limits)

Filed Under: Jumbo/Non-Conforming, Legislation, Mortgage

First Mutual Bank merging with Washington Federal

January 30, 2008 by Leave a Comment

Our company received a letter dated January 18, 2008 from Jeff Olson, Senior VP of Residential Lending for First Mutual Bank, headquartered in Bellevue, stating:

"Please be advised that the merger transaction between First Mutual Bank and Washington Federal Savings is scheduled to close Friday, February 1, 2008.

In consideration of that closing date, First Mutual Bank will not accept any residential loans…after 5pm, January 31, 2008…Loans that arrive after that date will be forwarded to the Wholesale Lending Department of Washington Federal Savings…These loans will be reviewed for eligibility under the Washington Federal loan program guidelines."

From First Mutual Bank’s website:

January 28, 2008 – Washington Federal has notified First Mutual that it has elected to pay all cash consideration to shareholders of First Mutual for their shares of stock. Within 10 days following the close of the merger of First Mutual with and into Washington Federal, First Mutual shareholders will receive $26.8359 in cash for each share of First Mutual common stock owned. The merger is scheduled to close February 1, 2008

First Mutual recently constructed a bank branch in my town of West Seattle.  Looks like it may become a Washington Federal branch now!

Filed Under: Current Affairs, Mortgage, Seattle

Should You Refi?

January 30, 2008 by 2 Comments

EDITORS NOTE: This post was written back in 2008 and mortgage rates have obviously changed 🙂  If you would like a mortgage rate quote based on current rates for your home located in Washington state, click here.

Last week I did a quick alert on the 30 year fixed hitting high 4’s-low 5s and I received an excellent comment from Sandy:

“…With all the costs and everything of refinancing, how much lower do rates need to be than what you currently have, before it makes sense to think about refinancing? I am just curious, as we have a 30yr fixed loan that is in the low 5s.”

You would think this is a simple question with a simple answer.  There’s much more to it.  Here are some things to consider if you considering refinancing your mortgage:

How long do you plan on staying in your home?   There are cost to the mortgage even if you’re getting a “no cost mortgage” where the hard costs are actually financed into the interest rate.   If you cannot break even on the cost before you plan on selling or refinancing again (low 4’s to high 5’s would be unlikely), then refinancing for the purpose of reducing your rate may not make sense.

Do you have an Adjustable Rate Mortgage?  If you’re going to retain your property longer than the remaining fixed term on the ARM (adjustable rate mortgage), you may want to consider refinancing into a fixed mortgage.

Do you have private mortgage insurance or a second mortgage?   Sometimes if someone has pmi or a piggy back second mortgage, refinancing may make sense if the can restructure the existing mortgages into one and if the blended rate of their existing mortgages are higher than what the new mortgage would provide.

Do you have a Jumbo mortgage?  Depending on what your mortgage balance is and your current rate, it may make sense to restructure your mortgage into a conforming mortgage.  This can be done by paying down the mortgage at closing or using a second mortgage, such as a HELOC or fixed second.

Would you like access to your home equity?   Refinancing can provide cash for home improvements, college tuition, debt consolidation, or what ever else you wish to do with your equity.   Most cash out refinances are priced higher than a rate term refinance.

Are you getting a divorce or separation?  If you have a mortgage with another person and the relationship is dissolving; you will need to refinance in order to remove the one who’s not staying in the home from the mortgage.   Divorce decrees and Quit Claim Deeds do not remove someone’s liability from the mortgage.  Plus, it’s a huge risk for the person who is no longer staying in the home.   Refinancing to remove an ex-spouse from the mortgage and to cash out their equity is not priced as a “cash out” refinance–it’s treated as a rate term refi.

Are you concerned about your home value declining?  Refinances are priced based on loan to value and there are underwriting guidelines that limit how high a loan to value may be.  In “declining markets” lenders have additional restrictions on loan to value lending limits.

Here are some quick “Do’s and Don’ts” for your refinance:

  • Do get a good faith estimate from your Mortgage Professional.  If you have not heard from your Mortgage Professional since you closed your loan or over the past few months, you might need a new one (they could be out of the business).
  • Do not rely on a simple “rate quote” without knowing the costs involved.
  • Do complete a loan application and provide the information your Mortgage Professional needs to lock in your interest rate.
  • Do not try to “play the market” and get the lowest rate…it’s far too volatile in this climate.   If the rate makes sense, lock it!

Must reads:

Picking your next mortgage by rate shopping?   You might as well be playing liars poker.

I’m happy to adopt your ARM.  No refi required.

 

Filed Under: Debt Restructuring, Jumbo/Non-Conforming, Mortgage, Mortgage Insurance, Refinance
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