Helping Washington State homeowners learn more about their mortgage options.
I'm scheduled to be "locked up" to raise funds for the Muscular Dystrophy Association on April 7, 2011 at Angelina's Trattoria in West Seattle.
While I have no idea who the special person was who nominated me to this event, I do know that I'm tasked to raise $2,000 to help King County families.
Please help "bail me out" by making a donation (click here). Every donation counts and I appreciate your support for this important cause.
Thank you!
I’m working with a West Seattle couple who are getting ready to buy their first home. This is something that is not unusual for me to hear:
“Our real estate agent was wanting us to contact a few lenders and have them all pull GFEs on the same day with the same perameters so we can choose who to go with. Then whoever has the best rates/lowest fees we were planning to have pull our credit…”
The real estate agent has good intentions, however this may not be the best advice for how to select a mortgage originator. First of all, this couple may find it difficult to estract a good faith estimate from a mortgage originator without being in contract. This is due to HUD’s [flawed] regulation that if a LO issues a GFE without a property address, once the buyers actually have a contract, the bona fide address of their new home will not constitute a “changed circumstance”.
It is solid advice that if you’re going to shop lenders, do so at the same time with the same perameters–just don’t expect a good faith estimate. DO get something in writing from the lender (it may go by many different names, including “rate quote” or “worksheet”, etc).
In addition to rates and fees, here are some other suggestions I think one should consider when selecting the professional who will be helping them obtain the financing of their home:
How long have you been a mortgage originator? I began originating mortgages on April 1, 2000. Prior to that, I was in the title and escrow business for 14 years.
What type of mortgage company/institution do you work for? Most will say bank, correspondent lender (some LO’s will call themselves “mortgage bankers”), mortgage broker or credit union. Each type of company offers unique advantages or disadvantages. Mortgage Master Service Corporation is a correspondent lender.
What type of programs does your company offer? We offer FHA, VA, USDA, Conventional, Jumbo (non-confoming mortgages). If you’re considering a certain program, such as FHA, ask the LO how long they’ve been originating that specific type of program.
Where are your loans physically underwritten? I’ve worked with our same underwriters for over 10 years at our main office in Kent since 2000.
Are you NMLS Licensed or Registered? There are differences between what each type of LO is required per the SAFE Act between Licensed and Registered LOs. LO’s who work for a bank or credit union will try to tell you that they’ve been adhering to the SAFE Act…only Washington Licensed LO’s are regulated by DFI and have a license to lose. There is more required of LO’s who are licensed per the SAFE Act than those who are registered. I’m NMLS Licensed and have been licensed since 2007 (when state licensing started).
I also recommend “googling” your mortgage originator. It’s totally my opinion, and perhaps a bit biased, that if your mortgage originator blogs or has a social media profile, their reputation is gold to them. They tend to be more transparent and current on ever-changing guidelines IF they are writing their own content. Google me!
NOTE: I originally published this article in February when HUD published the Mortgagee Letter. However with the increase to mortgage insurance on FHA insured loans just around the corner, I thought I should re-post this. If you are purchasing a home or refinanacing using an FHA insured loan, you will want to be in contract and have your loan application complete no later than April 13, 2011 to insure having an FHA Case Number issued in time.
Yesterday HUD issued Mortgagee Letter 11-10, making it official that FHA annual mortgage insurance will increase another 0.25% basis points on case numbers issued on or after April 18, 2011. The annual mortgage insurance is included in the monthly mortgage payment. There is no change (at this time) to the upfront mortgage insurance which is paid for at closing (typically financed or may be paid as a closing cost). This is in line with the Obama Administration's plan for reforming mortgages which was revealed on Friday.
Here's how this will pencil out for a 30 year fixed mortgage based on a sales price of $400,000 with a minimum down payment of 3.5% (base loan amount of $386,000).
FHA mortgages with a case number issued prior to April 18, 2011 (current as of this post):
386,000 x .90% = 3,474/12 months = $289.50.
FHA mortgages with a case number issued April 18, 2011 or later:
386,000 x 1.10 1.15% = 4,246 4,439/12 months = $353.83 $369.92
Difference in monthly payment: $64.33. $80.42
This will also impact FHA 203k rehab loans.
Remember, FHA annual mortgage insurance remains on the loan for a minimum of 60 payments regardless of loan to value. Even if a home buyer is putting down 20% towards the purchase of their Seattle area home, they will still have FHA mortgage insurance. FHA mortgage insurance will also remain on the home until the loan balance reaches 78% of the loan to value based on the original appraised value or purchase price of the home (which ever was less).
I have been originating FHA insured loans for the past eleven years at Mortgage Master Service Corporation (a Direct Endorsed HUD approved lender). I am licensed to originate mortgages for homes located in the State of Washington. If I can help you with your mortgage needs, please let me know!
Update: Home Affordable Refi Program has been extended through December 2013!
Good news for home owners who have a qualified conventional mortgage where their home has depreciated in value and they want to refinance to a lower rate or more stable program, the Fannie Mae Home Affordable Refinance Program and Freddie Mac's Relief Refinance have been extended to next summer (notes dated on or before June 30, 2012).
In addition to extending the cut off date for this program, which was scheduled to sunset this summer, Fannie Mae has expanded the loans they will consider for this program. From their March 14, 2011 announcement:
"Currently to be eligible for Refi Plus or DU Refi Plus the existing mortgage loan being refinanced had to be purchased by Fannie Mae prior to March 1, 2009 or in an MBS pool with an issue date prior to March 1, 2009. With these program changes, mortgage loans are now eligible if they were purchased by Fannie Mae prior to June 1, 2009 or in an MBS pool with an issue date prior to June 1, 2009….
Loans purchased by Fannie Mae between March 1, 2009 and June 1, 2009 will not recognized by Fannie's underwriting system (DU) until April 11, 2011.
I am thrilled that Fannie is adding three months of their loans to be eligible for the HARP program which makes the qualifying dates consistant Freddie Mac's program.
Remember, you do not have to go to your mortgage servicer (who you make your mortgage payment to) for this program…unless you have pmi. Wouldn't it be great if some of the big banks who have been refusing to consider borrrowers with private mortgage insurance for the HARP program loosen up? One can hope! If you're a borrower who's been refused a Home Affordable refi by your bank due to privatate mortgage insurance, you may want to sign this petition.
Related post:
The Home Affordable Refinance Program extended until next summer [includes info on Fannie Mae's Home Affordable program].
Freddie Mac's Home Affordable Refinance - Refinance Relief Program
UPDATE 4:00 March 22, 2011: I've been dismissed… back to business as usual!
UPDATE 3:00 March 21, 2011: I'm back at work this afternoon…back for another round of jury duty tomorrow morning.
I've been summoned for jury duty! I'm going to try to do my best to check emails and work while it is decided whether or not I make the cut for a jury…if you cannot rech me and you need to a rate quote, or to lock in a rate, please contact Dee Dee Fisher or Mike Hovey at 253-859-5300 at Mortgage Master Service Corporation.
This is my first experience with jury duty so I'm not exactly sure what to expect.
I will be responding to my emails and voicemails in the evening.
I'll be posting mortgage rates when I've completed this civic duty.
Every so often, I start writing a formal comment policy and it seems to wind up on the back burner. A few years ago, I decided to have comments approved before being published on Mortgage Porter due to some very spammy, self-promotional comments that mortgage lenders were leaving. I welcome comments on my blog…but I will not tolerate spam, self-promotional comments or anything vulgar.
I reserve the right to edit comments if needed…typically this would be removing self-promotional. You do not need to add your url or titles–please use the links provided in your signature line of the comment for that. I may be adding advertising to this blog in the future and if you're interested in paying me to promote yourself, let me know.
I reserve the right to delete comments that are pure spam and that add no value to the conversation or that are vulgar.
In addition, as everything on this blog is my content, I will not tolerate plagiarism. If you wish to refer to my content or use an excerpt from one of my post, I'm flattered, just do so with a link back and proper credit to me. This blog and all content (text, photos, videos, etc.) is protected by US Copyright.
I've been writing Mortgage Porter since late 2006 and it's become a wonderful way for me to connect with readers and to work with new clients who are seeking a mortgage for a home in Washington State.
Bottom line, I would love for this blog to be a place for discussion and conversation. If you have questions, please contact me.
Be nice and we'll all get along.
Someone recently landed on my blog by searching: "can a bank alter a good faith estimate?".
The answer is yes IF there is a qualifed changed circumstance or IF the good faith estimate has expired. If the mortgage originator made a mistake with a good faith estimate (regardless of how human the mistake may have been) they still cannot reissue the good faith until it has expired. This is why many mortgage originators or loan officers are still hesitant to provide the good faith estimate that HUD created last year.
Even though HUD created their GFE as a tool for lenders to shop, they have decided that the addition of a property address is not a valid changed circumstance — meaning that mortgage originators cannot reissue the good faith estimate because someone has gone from being "preapproved" to in a bona fide contract. From HUD's FAQs dated April 2, 2010:
"…if a GFE is issued wihtout a property address, the future receipt of the property address is not a changed circumstance that would allow the loan originator to issue a revised GFE."
So if an LO issues a GFE without an address, they are bound by those cost (subject to certain tolerances) if the buyer accepts the GFE prior to expiring. This is why MLOs (mortgage loan originators) have been issuing rate worksheets prior to having a transaction. However, if the MLO has received the criteria HUD had determined is an application a Good Faith Estimate must be issued within three days or the loan must be denied…this tends to happen more often with a refinance than a purchase scenario due to the valid address component.
When does a Good Faith Estimate expire?
From HUD's RESPA FAQs:
If a borrower does not express an intent to continue with an application within ten business days after the GFE is provided…the loan originator is no longer bound by the GFE.
It's a minimum of ten business days (two weeks) after the Good Faith Estimate is issued to the borrower that the mortgage originator is liable for the good faith estimate. If the MLO forgot to include the owners title policy fee (which the buyer doesn't pay for) they (or their employer) may out hundreds of dollars. On a $400,000 sales price, an owners policy runs about $1000. That's a hefty penalty to a mortgage originator for something the buyer doesn't even pay for in Washington state or that has nothing to do with the mortgage. Another expensive mistake is if the MLO forgets an upfront funding fee that FHA, VA or USDA loans have…HUD does not allow any wiggle room for human errors once that GFE is issued.
With all that said, President Obama's new Consumer Financial Protection Bureau is working on drafting a new Good Faith Estimate that is suppose to be friendlier (to conumers) which will also combine the Truth in Lending. Watch for this new document to be created by June 2012…with new guidelines on when a good fiath estimate may be changed or reissued.
It can be tough picturing spring with all the rain we seem to be enjoying in Seattle lately. In spite of the grey days, I do love spotting the signs of spring. Here are a few photos I captured in my neighborhood.
Camelia
Drops of rain on a cork screw willow.
Jonquils or Daffodils…I'm not sure?
By now I'm sure you've set your clocks forward one hour…this is also a good time to change the batteries in smoke detectors and to check your emergency safety kits at home (or create one).
Have a great day!
Rhonda Porter is a Licensed Mortgage Originator MLO121324 living in the greater Seattle area. Rhonda began her career in 1986 in the title and escrow industry and began her mortgage career in 2000. She enjoys helping people understand the mortgage process and started writing The Mortgage Porter in late 2006. Read More…
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