Helping Washington State homeowners learn more about their mortgage options.
I received this question a while ago from one of my subscribers:
As a lender, is it ethical to deny someone for a loan and then turn around and share not only that the loan was denied, but the EXACT reason the loan was denied (for example: too many NSFs, large deposit in checking account, hours cut back at work, etc.) with the applicant’s real estate agent as well as the listing agent who in turn shares it with the sellers?
In observance of Martin Luther King Day, Mortgage Master Service Corporation is closed. We will reopen for business as usual tomorrow morning.
This video is an indepth interview of Martin Luther King Jr. from NBC's Look Here back in October 1957.
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.
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.
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:
I 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?
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.
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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