I like to check out how my readers found me via the terms that were entered into a search engine (such as Google or Yahoo). Earlier this week, someone asked:
Why did I have to sign a form 4506?
Just a Friendly Reminder of All the Changes Coming Up in 20 Days
September 10, 2008 by Leave a Comment
The passage of HR 3221 has made many changes effective October 1, 2008. Here are just a few that will officially go into effect in 20 days:
FHA Mortgage Insurance is Increasing
Down Payment Assistance Programs will be gone
You have until the end of this year to take advantage of the higher conforming-jumbo and FHA-jumbo loan limits. Effective January 1, 2009, they will be reduced (from the passage of HR 3221).
And if you have not owned a home over the past 36 months, you have until the first half of 2009 to take advantage of the first time home buyers tax credit (interest free loan).
Is HR 3221 effecting you for better or worse? I’d love to hear how.
Get Ready, Get Set: Refi!
September 9, 2008 by Leave a Comment
Mortgage interest rates are back at attractive level ranging in the mid-5s for a 30 year fixed with only one point (high5’s with zero points). Our last refinance opportunity was an exercise in frustration for many. Home owners were contacting their loan originators with "what’s the rate now?" and calling later that day or next with the same question. Mortgage interest rates are a moving target. In our present market, I’m receiving on average 2-3 rate sheets per day. Mortgage interest rates can move just as quickly up as they have down. In addition, there are fewer and fewer loan originators remaining in the market to help those who are ready to refinance.
If you are serious about refinancing, I suggest the following:
- Contact your local Mortgage Professional (sorry, I can only help those who have property in the State of Washington) to find out what the current rates are and to see if refinancing makes sense for you.
- Have a recent mortgage statement or your Note to provide detailed information.
- Complete a loan application and be prepared to have your credit report ran (interest rates are very credit score sensitive).
- Have your most recent paystubs and last W2 ready. Your LO may also want your last bank statements and copies of your drivers license.
Refinances take approximately 30 days in this market, assuming there are no issues with your appraisal (a second appraisal or additional comps may cause extra time). Make sure that your Mortgage Professional is allowing plenty of time for your lock in order to avoid needing an extension.
If rates stay low and enough people take advantage and jump on the refi bandwagon, be prepared for the process to take longer than it seems it should. It’s a simple fact in this market there are fewer people doing the same amount of work. Every aspect of the transaction may become bogged down.
If you have a mortgage with a higher rate with a loan amount of $522,100 – $567,500, you may really want to act soon with your refinance as conforming jumbo and FHA jumbo loan limits are being reduced at the first of the year to $522,100.
Have a little patience, cooperate with your Mortgage Professional and get your lower mortgage interest rate.
It’s Official: Fannie & Freddie are Not Dead Yet
September 7, 2008 by Leave a Comment
I just received the official statement from the Federal Housing Finance Agency (FHFA)regarding the status of Fannie Mae and Freddie Mac. It has been announced that they are now in "conservatorship". FHFA has defined conservatorship on their handy Conservatorship Q&A page as:
"A conservatorship is a legal process in which a person or entity is appointed to establish control and oversight of a Company to put it in a sound a solvent condition. In a conservatorship, the powers of the Company’s directors, officers, and shareholders are transferred to the designated Conservator….
In this instance, the Federal Housing Finance Agency has been appointed by its Director to be the Conservator of the Company [Fannie Mae & Freddie Mac]…to keep the Company in a safe and solvent financial condition."
From this morning’s press release:
"The goal of these actions is to help restore confidence in Fannie Mae and Freddie Mac, enhance their capacity to fulfill their mission, and mitigate the systematic risk that has contributed directly to the instability in the current market. The lack of confidence has resulted in the continuing widening of their MBS [mortgage backed securities], which means that virtually none of the large drop in interest rates over the past year has been passed on to the mortgage markets. On top of that, Freddie Mac and Fannie Mae, in order to try to build capital, have continued to raise prices and tighten credit standards."
This could eventually translate to lower mortgage interest rates for you and me. Monday and the days following will be fascinating as we continue during these historic times in the mortgage industry.
I think it’s a little too early in the game for Fannie and Freddie’s Eulogy. The Government is all over making sure this patient is stable and recovering. Fannie and Freddie are "not dead yet"!
Calling All Seattle Flippers
September 6, 2008 by Leave a Comment
If you have flipped 10-12 house in the Seattle area, A & E’s "Flip This House" is looking for YOU! Read all about it here.
A tip of the hat to ARDELL.
Borrower Beware
September 3, 2008 by 2 Comments
You would like to think that with all the licensing and tougher times, that all the mortgage riff-raff have gone back to selling what ever it was they did before…it’s not true…not yet. In fact, it was recently announced that during the first quarter of this year, there’s a record amount of mortgage fraud. At first, I was surprised to hear this but after you think about it, it sadly makes sense. With less business, some mortgage originators become more desperate and make poor choices…the same holds true for borrowers who "need" a mortgage but don’t quite fit today’s guidelines. They’re both willing to do "what ever" to get a mortgage loan.
Here are a few actual scenarios I’ve come across recently that you may want to look out for.
Inflated home values. Recently a mortgage banker confidently told a borrower looking to refinance their home that it was worth a higher amount than what it actually was. Most mortgage rates are based on loan to value, so a rate at 80% LTV is better than one at 81% or higher. Mortgage originators do not know the value of your home until it has been appraised. We have some tools available, but they are not guaranteed. Watch out for originators who state your home is worth more (even if you really want to believe them). You may want to ask them how they arrived at your home value.
Non approved FHA lenders. FHA mortgage loans are hot. In fact, a majority of my loans are currently FHA over conventional. Ask your mortgage originator if they are approved to provide FHA financing. A big clue if they are not is if they are charging you an origination AND a discount point (often used to pay a lender to fund the FHA loan for the unapproved lender)–this is a RESPA violation (illegal). Inquire on how many FHA mortgage loans the mortgage originator has personally closed and how long they’ve been providing FHA financing. You don’t want to get wrapped up in a transaction only to learn your lender can’t complete the loan.
Another predatory trend that I’m spotting are loan originators who collect a fee for assisting a home owner in need with a loan modification. If you need help with your mortgage, PLEASE contact a HUD approved counselor or Hope Now before your pay a mortgage originator to refer you to an attorney.
Last, this isn’t really predatory in my book, but definitely something for borrowers to keep in mind: if a mortgage originator does not have a competitive product available to you, such as a second mortgage/HELOC or FHA loans; they don’t have to tell you. You may seek out a mortgage originator to provide a certain product and instead of them saying "I don’t have a competitive HELOC right now, you might want to check out XYZ"; they may say, "lets look at your first mortgage and do a cash out refi". Don’t get me wrong, a cash out refinance may actually make more sense than a second mortgage–just don’t do one because the LO is trying to make a paycheck. I’ve recently referred a past client to check out a credit union for a small second mortgage…I wish I could do the loan and keep my client contact–however, I simply
don’t have the product right now and I know their first mortgage rate is too low to refinance.
It never hurts to get a second (or third) opinion if what you’re hearing from your loan originator doesn’t seem to make sense.
There may be a solid reason if something doesn’t pass the "smell test". Trust your instincts.
Labor Day
September 1, 2008 by Leave a Comment
Mortgage Master is closed Monday, September 1, 2008 in observance of Labor Day. We will reopen for business as usual on Tuesday, September 2, 2008.
Sunday Drive to Sonoma County…Part 2
August 31, 2008 by 4 Comments
This is the final part of our trip to Sonoma County (part 1 is posted here). We had such a wonderful time, I 
thought I’d share some of our favorite parts of the trip with you as part of my Sunday Drive excursions on Mortgage Porter.
Westside Drive in Healdsburg will take you along a beautiful windy road packed with wineries along the Russian River all the way to the Pacific. We stopped at Twomey Cellars which has a great view and Matrix. Hop Kiln Winery (pictured right) is another "must see". It was too early in the morning for us to taste wines, we enjoyed walking around their grounds. Located right next door is Rochioli Vineyards–this was also a recommendation from Dave Savage (DSR). 
Sadly we were too early to sample these wines which are described as "legendary".
We drove along Westside Drive to where the Russian River meets the coast. It’s really beautiful and nice to dig your toes into some California sand. We headed south along the misty Highway 1 until we reached Bodega Bay. We had lunch at the Sandpiper in Bodega–do have the oysters baked in the chipolte sauce (I’ve been trying to recreate the recipe ever since). 
Bodega Bay is famous for Potters School, where Alfred Hitchcock’s "The Birds" was filmed. The Birds was probably the first "scary movie" I ever saw and is still one of my favorites to this day. Apparently many others agree as Potters School had many curious visitors. Note: no crows were harmed in this photo–this is a rental: 3 minutes for two bucks!
We caught Highway 12 to Highway 116 towards Forestville where we stopped at Iron Horse Vineyards. Another great recommendation from Dave which has wonderful views over the valley of endless vineyards. Our last winery on our vacation was Hartford Family Wines. We really enjoy their Pinot Noir back at home and purchased two bottles while we were there. And I was finally able to meet Dave Savage of Mortgage Coach, who not only provided us with great recommendations for our trip to Sonoma County, he also did a pod-cast interview with me a few months earlier.
You can check out photos from our trip here.
IMPORTANT TIP: Do not try to carry on your wines from Sonoma County Airport (or anywhere for that matter). The grumpy TSA person confisgated our two bottles of Hartford and would not allow us to check it or leave it for a friend (when he allowed the person right in front of us to check an item that was too large to be a carry on). I was told that the wine was donated, the airport will not provide a receipt. Lesson learned.
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