I’m Not Just a Blogger

January 14, 2011 by Leave a Comment

I recently had a parent of one of my son's friends say to me, "I thought you were in mortgage, are you an originator?"   She had googled mortgage terms and was surprised to have discovered my blog.

This is my fault.  I'm not really a salesperson.  I don't push my business cards on people and often, I don't have any on me when someone asks for them…which isn't a good practice for any business professional.   Sometimes I'll strike up a dialogue with someone who has read my blog and at the end, they'll ask if I originate mortgages.  It's flattering to have my blog used as a resource for information on mortgages for the greater Seattle area, however originating mortgages is how I pay my bills and make a living.   One day I may sell advertising on my blog…I'm not there yet and it probably wouldn't be enough income to keep the lights on!  Plus, I enjoy helping people with their mortgage needs.

A real estate agent contacted me earlier this week wanting to work with me again (she had left for a spell due to an "in house lender").   She had some great questions that I would be fitting for this post:

What type of mortgages do I originate:  Conventional, FHA (including 203k), VA, USDA and jumbo mortgages.

Are you a mortgage broker:  Not really.  Technically we are a Correspondent Lender which is similar to a mortgage broker as I can shop rates and programs from the banks and lenders we work with.  A big difference is that we fund the mortgage and sell it after closing.  A significant majority of my loans are processed and underwritten in-house at our main office in Kent.  We make the underwriting decisions based on the loan guidelines.  I think the last time I brokered a loan was 2-3 years ago!  

The difference between us and a bank is that, again, we can shop different lenders based on rates and products.  Most mortgage bankers are limited by their own products (or are paid better staying w/their products) and although many have their own processing and underwriting, they are typically down in huge remote centers and not "on-site".   Also, mortgage originators who work for depository banks or credit union are not licesed per the SAFE Act with the NMLS (they're only registered).

Where do I take loan applications:  I'm happy to meet people at my office, at the real estate agents office or at a coffee shop if needed (I prefer an office).  OR my clients have the option of completing their application on line (see the link above) and I will review their application with them over the phone.  Because the on-line application helps me to be more efficient, I offer a credit of $300 off closing costs (first mortgages only) at funding.  Some clients would rather meet face to face, and I totally understand and will accommodate that, others prefer working "on line"…and of course the telephone works great too!

Will you prequalify people over the weekend?  Of course.  Preapprovals are possible too depending on if the buyer/borrower is able to provide all requested documentation.  A prequalification is definitely quicker.

So I thought I'd take this opportunity for a quick commercial break to let everyone know that I am very happy to originate mortgages for homes located in Washington state.  I've been originating mortgages since April 1, 2000, I'm NMLS licensed through 2011 and plan on continuing with my career as a Mortgage Originator.

And now back to our regular programming.

Filed Under: Just for Fun

Two Great Real Estate Events coming to Seattle Center in March

January 11, 2011 by Leave a Comment

In less than two months, real estate agents, mortgage originators and other real estate folks, there will be two events they really should consider attending at the Seattle Center's Northwest Rooms.

On Wednesday, March 2, 2011, Frank Garay and Brian Stevens (the guys from Think Big Work Small) will be here to teach real estate peeps about video blogging at the Northwest Video Marketing Summit.  This is an all day event (sounds like a boot camp to me) where at the end of the day, you will have your own video blog.  This event is open to all real estate peeps and real estate agents may receive 3 clock hour credits.  The cost for this day long education (which includes your blog) is only $100.   For more information or to rsvp, click here and be sure to watch their video below.

The following day, Thursday, March 3, 2011, is something near and dear to my heart:  Seattle RE Barcamp.  This will also take place at the Seattle Center Northwest Rooms (same place as last year). 

The Seattle RE Barcamp is an "un-conference" where real estate professionals learn peer to peer – not planned presentations.  The agenda is determined the morning of the event by what the attendees (participants) want to learn.  Ideally, participants are sharing with each other "what they're doing now".   It is all about active learning and sharing and it's not limited to social media; latest real estate trends and issues are also discussed.   RSVP for Seattle RE BarCamp here.

There is no fee to attend the Seattle Real Estate BarCamp – it's FREE!  We depend on our sponsors to keep it that way.   If you're interested in supporting this ad-hoc event and having the love and adoration of 300+ real estate professionals, please click here.  By the way, I'm a proud sponsor of this event and so are Brian and Frank. 

I hope to see you at both events.  

Please spread the word!  You can retweet on Twitter (hash tags for the events are #vmssea and #rebcsea) and post this info on Facebook.  Here's a flyer for Seattle RE Barcamp that you can print and post in your office.

Filed Under: Events, Web/Tech

Mortgage Insurance Tax Deduction Extended (again) through 2011

January 6, 2011 by Leave a Comment

Late last month, President Obama extended the tax deduction for mortgage insurance that was set to expire 2010 through 2011.  Mortgage insurance is required when a mortgage has a loan to value of 80% or higher (or less than 20% home equity).  A majority of mortgages have mortgage insurance either with a conventional mortgage (private mortgage insurance) or with an FHA insured mortgage.

Qualified borrowers with adjusted gross incomes of up to $109,000 if married and filing jointly or up to $54,500 for single filers, may be able to deduct the mortgage insurance premiums they paid during 2011.  If the mortgage insurance is financed (as in VA funding fees, USDA guarantee fees), it may be deducted over a period of 84 months.  This mortgage insurance deduction is available for mortgages closed for purposes of January 1, 2007 through December 31, 2011 that qualify as an "home aquistion debt".

You must file an itemized 1040 to claim this deduction and your mortgage insurance premium should be reported on Form 1098you receive from your mortgage servicer.

Here is a link to IRS referencing the 2010 information.

Remember, I am licensed to originate mortgages for homes located in Washington State, including Seattle, Bellevue, Tacoma and Everett.  For more information about this (or any) income tax matters, please contact your CPA or professional tax adviser.

Related Post:

Private Mortgage Insurance Extended through 2010

Filed Under: Mortgage Insurance

Mortgage Originators should only originate mortgages

January 5, 2011 by 2 Comments

TwophonesmortgageporterI think it's unfortunate that the SAFE Act didn't address having professionals who are helping people with the possible largest transaction in their life be limited to originating mortgages.  I feel quite strongly that it is NOT in a consumers best interest to use the same person to originate their mortgage AND sell them their home.

There is simply too much to keep up with in this climate with both mortgage originating and being a real estate agent.  New laws are constantly being created and underwriting guidelines change in a blink of an eye.  How can someone doing two important jobs do either "one" full time job well if they're split between two?   And I guess I also wonder "why" people who act as mortgage originators and real estate agents feel they must do this.  I consider myself a fairly savvy mortgage professional and I'm sure I could sell a home–but I wouldn't dream of it.  I'm dedicated fully to my profession:  mortgage.  

I cringe at the thought of a buyer disclosing all of their financial information to a real estate agent acting as a mortgage originator…especially if they don't want to buy the "maximum" they potentially qualify for.  I often times work with buyers who could qualify to buy much more than their agent knows and they ask me to not reveal this information.  If you're working with someone who is originating your mortgage and selling  you a home, they can't keep this information separate – they  know how much you can buy. 

If you're considering using a mortgage originator who's also a real estate agent for your refinance, how do you know they won't try to sway you to selling (where they'l earn significantly more income) instead of refinancing?

It's almost a form a "dual agency" where you're having to rely a great deal on trust with the individual you've hired to care for your entire transaction.  For the "professional" who is acting as both your real estate agent and loan originator, this is simply too much commission (what a buyers agent is paid and the mortgage origination compensation at stake) to truly trust they're working in YOUR best interest.

HUD is not a fan of FHA mortgage originators having other employment in real estate related fields either (from HUD Handbook 4060.1 Chapter 2: Section 2-9)

Full, Part-Time and Outside Employment.  A mortgagee may employ staff full time or part time (less than the normal 40 hour work week). They may have other employment including self employment.  However, such outside employment may not be in mortgage lending, real estate, or a related field. Direct endorsement underwriters are included in this provision.

In Washington State, Real Estate Agents acting a Loan Orinators in a transaction are required to provide this written language as a Dual Capacity Disclosure:

This is to give you notice that I or one of my associates have/has acted as a Real Estate Broker or Salesperson representing the Buyer and/or Seller in the sale of this property to you.  I am also a Loan Originator and would like to provide mortgage services to you in connection with your loan to purchase the property.

You are not required to use me as al Loan Originator in connection with this transaction.  You are free to comparison shop and to select any Mortgage Broker or Lender of you choosing.

If you're getting ready to buy a home.  Select your professionals wisely.  You deserve a to work with a team of individuals who are dedicated and focused on their sole career.   This is a case where two heads are better than one.

If you're buying a home in the greater Seattle or Bellevue area, I'm happy to recommend a dedicated real estate agent and help you with your mortgage!

Click here if you would like a rate quote for a home located anywhere in Washington.

Related Post:

Who Does Your Loan Originator Really Work For?

Bribery to Work with the Builder's Preferred Lender

Is Your Agent in Bed with a Title Company?

Filed Under: Opinion, Rant

Happy New Year

December 31, 2010 by Leave a Comment

Mortgage Master Service Corporation is closed today in observance of the holiday.  We will reopen for business as usual on Monday, January 3, 2011.

We wish you a healthy, happy and prosperous 2011.

Filed Under: Current Affairs

Adjustments to Conventional Mortgage Pricing Means Higher Rates on January 1, 2011

December 30, 2010 by 1 Comment

UPDATE DEC 19, 2013: New (more expensive) LLPA’s have been released.

UPDATE JAN 3, 2011:  Not all lenders are implementing this fee increase (yet).  This is perfect example of an advantage of working with a correspondent lender since we work with more than one bank or one banks products/rates. 

Conventional mortgages (Fannie Mae and Freddie Mac) are increasing their LLPA, also known as “Loan-Level Price Adjustment” effective on all mortgages with a term greater than 15 years on loans they purchase on April 1, 2011 or later.   Although this doesn’t go into effect until April Fools, wholesale lenders will make these adjustments to their rate sheets well in advance so that they don’t have to take the price hit when the sell the loan to Fannie or Freddie.   I am receiving memos from the lenders we work with stating that these price adjustments will go into effect on loans locked January 3, 2011.

The new price adjustments are outlined in the red box below.  The changed adjustements are in bold in the red box (click on image to enlarge).  You can view Fannie Mae’s complete LLPA schedule here – there are additional hits that may apply depending on your scenario (such as condos, subordinate financing, etc.).

FannieLLPA

LLPA’s are nothing new.  We’ve had them for the past couple of years and the adjustments are typically factored into your rate.  Remember, typically (but not always) 1% in fee equals 0.25% in rate.   So if your “low-mid” credit score is 700 – 719 and your loan to value is 75.01% or higher, your interest rate is going to be about 0.25% higher in rate than someone with a 740 or higher credit score with a loan to value of 60.01 – 75%.

The hardest hit with this adjustment is borrowers with credit scores of 699 – 640 with loan to values over 80%.   These borrowers should consider FHA insured loans for financing which do not have the same level of price hits as conventional (at this time).

The best pricing is for borrowers with credit scores 700 or higher AND a loan to value of 60% or lower.   Borrowers with a 740 or higher credit score and less than 25% down payment or home equity will now be hit with a 0.25% adjustment.

These price hits impacts loan amounts of $567,500 or lower for homes located in King, Snohomish and Pierce Counties.   For a complete list of Washington state conforming loan limits, click here.

Risk based pricing is one more reason why people who are considering a mortgage, regardless of if it’s to purchase a new home in Seattle or refinance their existing home in Bellevue, should start early with the preapproval process.  Just being one digit off on your low-mid credit score may cost you.  A qualified mortgage professional can help you make the right moves with the goal of improving  your credit score if given enough time.

If you need a mortgage for a home located in Washington State, I’m happy to help you.  I’ve been originating mortgages at Mortgage Master Service Corporation since April 2000 and I’ve been licensed since 2007 (when mortgage originator licensing was first mandated in Washington).

Filed Under: Credit Scores and Reporting, Fannie, Freddie and FHFA, FHA

Can Your Mortgage Originator Legally Take a Loan Application Next Week?

December 28, 2010 by Leave a Comment

You may want to check with your preferred mortgage originator to make sure they have fully renewed their license for 2011.  If they have not, or if they started the process late and are waiting for their 2011 license from DFI, they might not be able to legally take a loan application next week.

Some mortgage originators are not required to be licensed.  Thanks to Congress, the SAFE Act allows mortgage originators who work for credit unions or depository banks (like Wells Fargo, Chase and Bank of America) to only be registered.  It's unfortunate that our elected officials did not create the SAFE Act to have the same standards for any mortgage originator who takes a residential loan application.

Washington State Mortgage Originators who are required to be licensed should check on DFI's website to make sure they have met all the steps required to originate loans in 2011.   If certain steps are missing, including the renewal being approved, DFI has it clearly flagged as "needed".  Some mortgage originators have yet to pay for their renewal fees which will also prevent them from taking a loan application as a licensed mortgage originator as of January 1, 2011.

NMLS 

I am fully licensed to originate mortgages for homes located in Washington State.  I received my 2011 license from DFI in mid-November.  

From DFI:

"As of [Dec. 22, 2010] 59% of Washington MLOs successfully renewed and have been issued their 2011 license.  This percent represents 4,381 individuals who will be working as MLOs come January 1st."

Note:  MLO = Mortgage Loan Originator. 

If you find your mortgage originator has not completed the steps to be NMLS licensed in 2011, it's possible that they may have decided to work for an institution that is not required to be licensed (depository bank or credit union) or perhaps they simply procrastinated.   If you find they're not fully approved to take an application in 2011 per this list, you may want to ask them directly what their plans are for the new year. 

Mortgage Originators (MLOs) who allow their license to expire may have to go through additional steps to renew and may be subject to additional fees. 

If you are a Washington State Mortgage Originator - do double check DFI's list to make sure you have everything set for 2011.

Filed Under: Legislation

Merry Christmas and Happy Holidays

December 24, 2010 by Leave a Comment

I wish you a very happy holiday season and hope you're surrounded with family, friends and loved ones.   Mortgage Master Service Corporation is closed today so that our employees can do just that.  We will reopen for business as usual on Monday, December 27, 2010.

 

Filed Under: Current Affairs
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