Helping Washington State homeowners learn more about their mortgage options.
Many of my mornings have been spent watching CNBC's Mark Haines with Erin Burnett and I'm saddened to learn that Mark passed away at the young age of 65. I loved his wit, humor and ability to cut through political bolony.
Here's one of my favorite Mark Haines moments.
My heart goes out to his family and friends.
The Consumer Protection Financial Bureau would like you to vote on two different proposed mortgage disclosure forms created to replace the current Good Faith Estimate and Federal Truth in Lending documents. You have until Friday to make your selection between the Pecan Bank or the Ficus Bank examples. Both contain (and are missing) the same information.
I personally prefer Ficus Bank (the darker example) as it discloses key information at the top of the form, including the interest rate and monthly payment. The Pecan example features projected payments along the top section along funds due at closing being the very first box on the form. I've written more about the proposed disclosures at Rain City Guide. It's really a choice of style and arrangement of content.
I still believe that most consumers would rather return to a detailed Good Faith Estimate featuring all closing cost itemized instead of having certain cost lumped together where it's hard to see exactly what they're paying for. Why not have the Good Faith Estimate resemble an estimated HUD-1 Settlement Statement so that there is congruency between the beginning of the transaction and closing?
I've provided my opinions and vote to the CFPB, have you?
After you visit CFPB's site and have voiced your opinion, I'd love to know which selection you made and why.
I received a really nice thank you card from Shannon Ressler at Findwell Realty last week that I want to share with you. We recently helped Shannon's clients buy a vintage bungalow that was a short sell in the Magnolia neighborhood of Seattle using an FHA insured mortgage. Being a short sell and an FHA insured loan, there was no shortage of paper work and the transaction was coming "down to the wire".
Closing was set to take place on Friday…and early Thursday morning, I received a message from one of our buyers saying he was flying out at noon for a family event…he'd be back on Monday. Luckily Mike was able to reschedule his flight until four, however, we were still in a crunch to get docs out. NOTE: I normally like to have loan docs out several days before signing…but sometimes transactions (especially short sales) don't happen that way.
Extentending contracts with short sales can be a chore since in addition to dealing with a buyer and a seller, you also have the seller's lender. Adding to this, I had renegotiated our clients interest rate lock lower and the lender I had the rate locked with charges a higher extension fee once a rate lock has been renegotiated. We really needed to close on time.
We were able to rush loan docs out to the escrow company. As a correspondent lender, we prepare our loan docs at our main office in Kent and we make our own underwriting decisions (following guidelines, of course)…escrow was gracious receiving loan docs last minute AND THEN, their system crashes. I have to say, I've never had this happen! Mike's flight out was rapidly approaching. We were running out of time and escrow's computers were not cooperating.
Marilyn Porter, President of Mortgage Master Service Corporation (and my sister-in-law) had an additional set of their loan docs printed and we arranged to meet our buyers at Sharps Roasters by SeaTac Airport. While we were heading to Sharps, Mike and Mary obtained their cashiers checks for the estimated amount due for closing. Marilyn even had a couple orders of sliders and fries waiting for everyone…figuring with all the rushing around, they'd probably be hungry.
By the time we were done with the signing, escrow's system was back up and they emailed their docs (escrow instructions, estimated HUD-1 Settlement Statement) to our clients to sign and return. I created a video review of their estimated HUD since escrow was not able to review it with them.
Our job wasn't over. Escrow needed the buyer's cashiers checks before 4:00 that day in order to have them in time for funding tomorrow. We wound up having the wire instructions emailed to our phones and we deposited the buyers checks directly into escrow's accounts.
And, I'm happy to say that we DID fund and close on time.
I am so proud of the crew I work with at Mortgage Master Service Corporation.
Thank YOU Shannon, for your recommendation and thoughtful card! Shannon was an asset throughout this transaction, it was a great team effort from all.
A couple days ago, Fannie Mae addressed questions regarding the high balance loan limits that are set to expire effective with Notes dated October 1, 2011 or later. The current (technically "temporary") high balance limit in the greater Seattle – Bellevue area is $567,500, the new loan limit ("permanent") after September 30, 2011 is $506,000.
Here are some points from Fannie Mae's FAQ's:
Q2. Are the loan limits definitely expiring? What would it take to get them extended or changed from the permanent loan limits?
Congress would have to take action to extend or revise the temporary loan limits, which were originally put in place through the Economic Stimulus Act of 2008 and have been extended through a series of additional legislative actions to provide support to the mortgage market…. The February report to Congress by the Departments of Treasury and [HUD] stated "the Administration recommends that Congress allow the temporary increases in limits that were approved in 2008 to expire as scheduled on October 1, 2011 and revert to limits established under HERA [Housing Economic Recovery Act]." As such, we do not expect any further extensions.
Q3. What will happen in 2012? Could permanent loan limits go down?
…the Federal Housing Agency (FHFA) is required to evaluate loan limits annually, and then revise limits accordingly. The first set of HERA loan limits (a.k.a. "permanent" loan limits) was established for calendar year 2009 based on the median home prices….While there have been median home price declines over the past three years, FHFA followed a policy to "not permit declines relative to the prior HERA [permanent] limits."
…no changes are expected to those permanent limits between October 1, 2011, and December 31, 2011. FHFA has not indicated whether it will continue its policy of not permitting declines in HERA-based limits beyond 2011…2012 loan limits could decline from those that will apply in the fourth quarter of 2011.
Loan limits for 2012 are expected to be released by FHFA in mid-November of this year. Current counties that have temporary "high balance" loan limits in Washington State are:
Only King, Snohomish, Pierce and San Juan Counties will continue to have high balance loan limits from October 1, 2011 to December 31, 2011. The other Washington counties listed (and all counties not listed) above will be returning to a conforming loan limit of $417,000 through December 31, 2011.
We don't know what 2012 brings for loan limits. We should learn more in November.
If you would like me to provide a rate quote for your home located anywhere in Washington, click here.
Our current FHA and Conforming High Balance loan limits are scheduled to roll back on October 1, 2011 unless Congress decides to act quickly and extend them. In the greater Seattle area, the loan limit for a single family dwelling is $567,500, after September 30, 2011, the conforming limit is set to be reduced to $506,000. The difference of $61,500 will impact home owners, home buyers and sellers alike.
If you are a home owner in King, Pierce or Snohomish County considering a refinance and your loan amount is higher than $506,000; effective October 1, 2011 your loan amount will be considered a non-conforming (aka a jumbo). This will impact all counties in Washington State who currently have temporary "high balance" loan limits.
Notes dated after September 30, 2011, conforming loan limits are set to return to those as set forth per the Housing and Economic Recovery Act of 2008 (HERA). For single family homes, conforming loan limits look like this as of October 1, 2011:
King, Pierce and Snohomish Counties: $506,000 from the current $567,500, a $61,500 reduction.
San Juan County: $483,000 from the current $593,750, a $110,750 reduction in loan limit.
Kitsap County: $417,000 from $475,000, a $58,000 reduction.
All other counties will have a maximum conforming loan amount of $417,000.
Lenders will start to implement this well before the September 30th deadline as no one wants to be left holding yesterday's high balance loan amount when the limits have dropped as they'd have a jumbo mortgage with a conforming rate. Since the effective date is based on the Note date and not when an application is taken, this will cause the new loan amounts to appear sometime this summer in my estimation.
If you are considering a refinance and your loan amount is above the future loan limit and below the current (between $506,000 and $567,500 in Seattle or Bellevue) you don't want to delay! Having less financing options available for homes may also impact appraised values as fewer people will qualify based on the jumbo guidelines.
If you are considering buying a home and you're not wanting to come up with the additional down payment required to make up the "gap" between the loan limits, you may want to try finding that home by early summer and close well before September 30, 2011.
If you are selling a home that would be ideal for a "high balance conforming" borrower (in the Seattle/Bellevue area, that would be a sales price of $700,000 to $500,000), I suggest you make sure you price your home competitively and consider all types of financing (including FHA and VA). Once the new loan limits go into effect, you've lost a lot of potential buyers who may not be eager to come up with the additional funds to stay in the conforming or FHA market.
If you're a Listing Agent, please do your clients a favor and accept FHA and VA offers.
I'll continue to keep you posted as more information becomes available.
The Talon Group, a local escrow and title company, addresses which utilities are required to be paid at closing.
NOTE: USDA INCOME LIMITS HAVE BEEN UPDATED SINCE THIS POST WAS PUBLISHED.
USDA is a government backed program that allows zero down payment on homes that are in a designated rural community for families earning less than a certain income. A majority of Washington State single family residences (homes and condos) qualify…of course if you live in metropolitan areas like Seattle or Bellevue, odds are your home will not. To qualify, families must be without "adequate housing" (may not own a home or adequate home), must have reasonable credit history and be able to afford the mortgage (29/41 is the debt to income ratio guidelines). I've written more details about USDA home loans on this earlier post.
Income limits vary by county and the entire household income is considered (not just the primary borrowers or those borrowers on the mortgage) for determining if the income meets the guidelines. This is separate from income considered for "debt-to-income" ratios. USDA loans allow incomes up to 115% of the median income for the area. Income limits vary on household size from 1-4 person or 5-8 person.
As of the publishing of this article, in Washington, the income limits by county are:
You can check current USDA income limits by visiting the USDA site (clicking here)…be sure to click the "guaranteed" option. Income limits can and do change. You can also use USDA's income eligibility calculator which will factor in deductions to income. You're looking for the "guaranteed" results and not "direct".
Income used to determine if a family is under the household income limits includes all those (18 years and older) who will be living in the home regardless of whether or not they're on the mortgage. Incomes of children over 18 who working AND who are full time students are not factored.
Once you've determined that you meet the household income limits, the next step is to see to see what communities in your area are eligible for USDA financing. You don't have to go too far from Seattle or Bellevue to find homes that do qualify for this type of mortgage. Using the USDA site, under "Property Eligibility" click "Single Family Dwelling". From there you can either enter a specific address or click on the map to narrow down your search.
Sellers and real estate agents who are working in neighborhoods that qualify should be sure to include this program as an option they'll consider for financing on their offers.
I'm pleased to offer USDA financing as an option for borrowers who meet the criteria since there is no private mortgage insurance and the program is a 30 year fixed rate. If you have any questions regarding USDA or other mortgage programs for financing homes located anywhere in Washington State, please contact me, I'm happy to help!
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…
Recent Comments