Fed Funds are Unchanged

August 12, 2009 by Leave a Comment

To the average American home owner with a home equity line of credit, the Fed leaving the Funds Rate at a target range of 0-0.25% means that they can enjoy their low rate on their HELOC for the time being.  Once they begin to adjust the Funds Rate upward, HELOCs which are most often attached to the Prime Rate, will rise as well.

Today's Press Release from the FOMC states:

"Conditions in financial markets improved further in recent weeks.  Household spending has continued to show signs of stabilization but remains constrained  by ongoing job losses, sluggish income growth, lower housing wealth, and tight credit…."

The Fed reiterated their commitment to "employ all available tools to promote economic recovery" and to the purchase of mortgage backed securities and treasury securities:

"…to provide support to mortgage lending and housing markets and to improve overall conditions in private credit markets, the Federal Reserve will purchase a total of up to $1.25 trillion of agency mortgage-backed securities and up to $200 billion of agency debt by the end of the year. In addition, the Federal Reserve is in the process of buying $300 billion of Treasury securities. To promote a smooth transition in markets as these purchases of Treasury securities are completed, the Committee has decided to gradually slow the pace of these transactions and anticipates that the full amount will be purchased by the end of October…."

I take this last line to mean that we are not going to see the 4.5% conforming rates that were manipulated earlier this year to the artificial lows.  It would take other forces outside the Fed to see rates dip that low again.  Only time will tell.

Filed Under: The Fed - FOMC

From the Junk Mail Bag

August 10, 2009 by Leave a Comment

Seems like junk mail from random mortgage companies are on the rise again.   I recently had a client who I helped with a home purchase utilizing an FHA mortgage send me a piece of junk mail that he had received from a company (NOT Mortgage Master) that bothered him beyond the typical “deluge of refi offers from firms who’s marketing strategy is to look up public records for a targeted mailing“. [Read more…]

Filed Under: Homeownership & Lifestyle Tagged With: ,

What’s worse than a low appraisal with a mortgage? How about losing your job.

August 4, 2009 by Leave a Comment

Appraisals coming in lower than the home owner estimated is not uncommon these days…most of time, the transaction may still work outdepending on if the mortgage has to be repriced due to higher loan to values or if the home owner wants to bring in additional cash to apply towards their home equity to lower their loan to value.  They at least have options.  

I have lost more transaction to clients losing their jobs or having their hours cut back.  It's really sad to see people who have dedicated years of their life to a company to be dismissed and to add insult to injury, they're most likely not able to obtain a much needed lower rate through refinancing.  They can try contacting their mortgage servicer to see if a loan modification is possible–results vary.

Friday the Jobs Report comes out this Friday and it's weighing heavy on my mind.  How many hundreds of thousands of Americans will be join our millions and millions of unemployed workers.   With an unemployment rate of 9.5%, I think it pays to ask yourself "what would I do if I were laid off tomorrow?"  Nobody expects it, but in this climate, we have a 1 in 10 odds of losing our jobs (hopefully Friday's report will show improved figures).

I strongly encourage you to consider this and to make sure that you have an emergency reserve fund with at least 3 months of your living expenses set aside.  Do you know how much it cost for you to live one month?  Add it all up and review your budgets–how would your spending behavior change if you knew your paycheck might be ending.

I also recommend that after you have 3-6 months of living expenses put away in a safe spot that you look at your credit cards.  What are your current interest rates?  Has the bank recently jacked up your payment percentage?  I do not recommend closing them at this time–should you wind up being unemployed, you might need to rely a bit on the cards (ugh, I hate saying that).

And remember just about everything is temporary.  Should you wind up unemployed…things will get better eventually.  Blemished credit will recover and jobs will come back.  

I've just always been one to plan for the worse and expect the best.

NOTE (added after publishing the post):  I recommend that if you are employed and have benefits (such as insurance) that you take advantage of them sooner rather than later.  Schedule appointments with your dentist, doctor, etc. and get your check-ups. 

To try to end this post on a light note… how about some comedy from Abbott and Costello.  You can always get a job as a union loafer.

Filed Under: Economy

National Night Out is Tuesday, August 4, 2009

July 28, 2009 by 4 Comments

Neighborhoods across the county will be holding events to get to know each better on the evening of Tuesday, August 4, 2009.  If you live in Seattle, you can register your "block party" with the NightOut09 Seattle Police Department.   Our neighborhood in West Seattle has enjoyed this chance to get together for the past couple of  years with a fun pot luck with someone from the SPD stopping by to answer our questions, informing us of recent crime trends or things to be aware of.

If you live in the Bellevue area, Crossroads Mall will be holding a National Night Out event from 4:00 – 7:00  p.m. with games and goodies for the kids.

The City of Renton will be hosting a Night Out event at the Highlands Community Center from 4:00 – 7:30 pm with free food and games.

NATIONAL NIGHT OUT is designed to:

  • Heighten crime and drug prevention awareness;
  • Generate support for, and participation in, local anti-crime programs;
  • Strengthen neighborhood spirit and police-community partnerships; and
  • Send a message to criminals letting them know that neighborhoods are organized and fighting back.

It's not too late to plan an event for your neighborhood.  Being aware and knowing your neighbors is a great first step in preventing crime.  You can start by contacting you local police department.

If you know of a local Neighborhood Night Out event, please share it with us and post it in the comment section.

Update:  I'll add neighborhood events as I receive them via comments to the body of this post.

High Point in West Seattle, will be holding a large Night Out event at Commons Park.

Kenmore City Hall from 6 p.m. – 9 p.m.   Join the Kenmore Police Department at the annual National Night Out Against Crime event. The police chief will barbeque hamburgers and hotdogs for Kenmore citizens. Information will be available on block watches, house checks, personal safety, fingerprinting and ID cards for kids, bicycle registration cards and home fire prevention. FREE!

Filed Under: Events

Recording fees increasing Monday, July 27

July 27, 2009 by Leave a Comment

Effective today, recording fees are going up statewide due an increase with the homeless housing fee from $10 per recorded document to $30 per HB 2331.

Recording your Deed of Trust or Deed in the State of Washington now cost $20 more each.

Hat tip to The Talon Group.

Filed Under: Legislation

Sunday Drive: Skillet’s Gourmet Streetfood

July 26, 2009 by Leave a Comment

Hopefully you won’t have to drive too far to find Skillet Streetfood…in fact this mobile delight travels throughout the week to several Seattle neighborhoods, including West Seattle, Queen Anne, Capitol Hill, Fremont, SODO, Bothell and Redmond.

Last weekend, I decided I could wait no longer…I had to check out the infamous Skillet featuring gourmet bites created in an airstream trailer.

Skillet Food Truck in West Seattle [Read more…]

Filed Under: Seattle, Sunday Drive - Neighborhood Tours, Testimonials Tagged With: , ,

A Quick Question: Should I Refi?

July 22, 2009 by 2 Comments

This comment was left on a post I did a while back about how you don’t really skip two payments when you’re refinancing since mortgage interest is accruing.  I thought this comment was worthy of a post of it’s own. [Read more…]

Filed Under: Refinancing & Home Equity Tagged With:

Breaking Up is Hard to Do…Especially When You Own a Home Together

July 20, 2009 by Leave a Comment

I’ve written articles before about issues to consider if you’re going through a divorce and have a mortgage…what if you were never married?  Couples (or single people) often buy homes together…what if worse case scenario, it doesn’t work out and one party wants to keep the home?

A divorce decree allows you to refinance to cash out the other spouse and still have the mortgage treated as a “rate term” refinance.  There are significant differences between a cash-out and rate-term refinance.  A cash out refinance is limited to an 85% loan-to-value and the rate is higher (approx. 0.5% in fee at an 80% loan to value with credit scores of 740 and higher).  If there is a court order, it’s possible that FHA might allow a cash-out refi with a non-married co-owner.

There’s also the issue of excise tax.  An excise tax affidavit is filed whenever a deed is recorded (in the State of Washington).  Excise tax may not be due when the person being removed from vesting is pursuant to a divorce decree.  However, when there is no decree or court order involved and the person is being removed, excise tax may be due as they consider the transfer of that person’s interest to the other person “a sale“.  I’m told the county may charge excise tax on half of the underlying mortgage.  As of the date this post was published, King County charges 1.78% for excise tax.   Possible exceptions to this would be if the co-owners were registered as domestic partners, or the transfer of the property to one co-owner is by court order. 

Just like a divorce, simply deeding the property over to the party who’s remaining in the home does not remove the other person from responsibility or liability of the mortgage.  And it probably makes good sense to contact an attorney who specializes in divorce to assist with the separation of the real estate property.

EDITORS NOTE: This post was written in 2009 and may not be as accurate with regards to excise tax with laws regarding recognizing partners since the writing of this post.

Filed Under: Debt Restructuring, Refinance Tagged With:
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