Happy 2nd Birthday Mortgage Porter!

November 28, 2008 by 2 Comments

I'm often asked what caused me to start blogging…well two years ago today I was watching the late night news about a local case of mortgage fraud and the reporter closed the story with wrong information about loan originator licensing.  I just had to get the truth out.  I wasn't sure if anyone would ever read Mortgage Porter.  Two years later, I have over 750 articles written with my clients in mind and I hope to continue writing for you.

To celebrate my 2nd blog birthday of Mortgage Porter, I have a special treat for my readers and commenter's.  Now when you leave a comment, you have the option of creating a free typepad profile which will appear when you leave a comment.  Your profile may also include a photo.  Of course, you can still comment anonymously, if you prefer.  Comments will also be in a thread format instead of a "line" format, which may promote conversation with each other.  You can also be notified of future comments.   This is a new feature that I'm literally installing as I type…so hopefully it won't throw a fit like a typical 2 year old!

Again, many many thanks for reading Mortgage Porter.

Filed Under: Weblogs

Happy Thanksgiving

November 27, 2008 by 2 Comments

There are so many things to be thankful for in this world.  For starters, I have a wonderful family.  At this time, I would also like to thank my many clients, friends and those of you who are reading this blog.  I truly appreciate all of you.  I hope you are surrounded with loved ones this holiday.

Mortgage Master is closed today and tomorrow in observance of Thanksgiving.  We will reopen for business as usual on Monday, December 1, 2008.  Soon I'll be working on the appetizers that we're bringing over to my sister's home…today I'll be enjoying the company of family.  Although my office is closed tomorrow, I will be working on Good Faith Estimates for clients who are interested in our current low rates.

Happy Thanksgiving!  By the way, if you're still trying to figure out how you're going to cook your bird, here's my recipe for smoked Turkey Breast on a Big Green Egg.

Filed Under: Current Affairs, Recipes

Client Question: Where is your YSP?

November 24, 2008 by Leave a Comment

I've been asked this a couple times this week…I'm wondering if it's possibly caused by Aubrey Cohen's recent article in the PI about mortgage brokers, subprime mortgages and outrageous yield spread premiumsor if consumers are more savvy and aware of YSP.

Loan originators who work for mortgage brokers may receive a yield spread premium from the lender they are brokering the loan to.  This YSP is required to be disclosed on the Good Faith Estimate and the Loan Application Disclosure Form (if you're providing a mortgage for property in Washington State) and as well as the HUD-1 Settlement Statement.  YSP has not only been used for loan originator compensation, it has also helped pay for closing costs or provide mortgages with "no points". 

Loan originators who work for banks, credit unions or correspondent lenders are not paid YSP (unless they are brokering the loan).  However they may still be receiving compensation on "the back side" of the transaction.  It's just not required to be disclosed.  Part of the reason for this, with correspondent lenders, is the inherent difference between them and mortgage brokers.  Correspondent lenders underwrite, prepare loan documents and fund the transaction from their credit lines.  The mortgage is sold to the lender after closing.  A mortgage broker merely originates the transaction and may do some processing/coordinating with the lender.  They do not underwrite or fund the transaction.  A correspondent lender assumes greater responsibility for the transaction and may be compensated after the loan is closed.  Often times, correspondent lenders may receive favored pricing over a traditional mortgage broker as they assume more risk and are performing more of the work (underwriting, drawing docs and funding) than the broker. 

With the media focused on YSP, many consumers have become misdirected on how to select the person who will be advising them on one of the largest transactions they may face in their lifetime.  Focusing on how much they believe a loan originator is compensated will not provide them with the lowest rate, best service or most qualifed Mortgage Professional.  For example, if:

  • Lender A is a mortgage broker who quotes 6.00% priced with zero points and a YSP of 1% of the loan amount.
  • Lender B is a bank who quotes 6.00% priced with zero points (nothing is reported on the back end).
  • Lender C is a correspondent lender who quotes 5.875% with zero points (nothing is reported on the back end).

All loan originators are being compensated in the scenario above…I would bet pretty close to the same.   If the going rate is 5.875-6.000% (as based on this example) why would anyone care how much someone is compensated?  I could totally understand if they received a rate of 6.500% (assuming all loans are locked at the same time/date as rates are currently changing on average three times a day and a 0.25% swing is not uncommon).   When you're shopping for a big ticket item, such as a TV, do you care what the salesperson is making or do you care how much YOU are paying?

If you're a long time Mortgage Porter subscriber, you know that I believe that selecting your mortgage by rate is not the best route to go.  Especially considering that you're making this decision based on a rate that is moot unless you are ready to lock at that moment.  Rates are a moving target.  For this reason, the YSP the mortgage brokers are forced to quote are only a best guestimate because they do not know what they will be paid until the loan is locked.

I don't have a problem letting clients who want to know what the compensation may be "on the backend"…just ask.  I question why a consumer would care if the rate is the going market or better.

Related post:

How Am I Paid?

Picking Your Next Mortgage by Rate Shopping?  You Might as well be playing Liars Poker.

Now is the time to work with a Correspondent Lender

Filed Under: Mortgage

Do You Enjoy Cooking? Check out Culinary Communion

November 23, 2008 by Leave a Comment

Last weekend I went back to school–to learn how to make pizza.  I specifically had PB160030 major issues with making pizza dough that didn't turn into a leathery brick.  Mixing amazing toppings together and baking them in a real brick oven in the front yard was quite the foodie experience.  The best part was sharing all our creations as they were completed!

I'm making home made pizza tonight and the dough is looking very promising!   Culinary Communion is located on Beacon Hill in Seattle. 

They have many classes to chose from–I've done the Wines of the World series PB160040 last   year.  My next course is how to make pasta (my sister will be joining me)! 

Culinary Communion is available for private events as well.  I highly encourage you to check out this fun local experience.

More photos from my Culinary Communion class: click here.

Related post about my first pizza cooking experience (post Culinary Communion course): click here.

Filed Under: Food and Drink

Fannie and Freddie Suspend Foreclosures

November 20, 2008 by Leave a Comment

Statement from FHFA James B. Lockhart:

“The foreclosure suspension announced today by Fannie Mae and Freddie Mac will help homeowners and servicers utilize the new streamlined loan modification program (SMP) announced by FHFA, Fannie Mae, Freddie Mac and HOPE Now. With this suspension, seriously delinquent borrowers may have an opportunity to avoid foreclosure and work out terms to stay in their homes.”

According to Fannie Mae’s press release, this suspension will take place from November 26, 2008 – January 9, 2008 for owner occupied, single family dwellings for home owners who have not filed for bankruptcy and who has missed three or more payments.

Related Post: Fannie and Freddie’s New Deal

Filed Under: Fannie, Freddie and FHFA

Are You a Mortgage Originator in Washington State?

November 19, 2008 by 2 Comments

I'm wondering if you have successfully registered with the Nationwide Mortgage Licensing System?  Please comment below and let me know.

I registered at 9:00 pm on October 1, 2008 and DFI is telling me that they're classifying my registration effective October 2, 2008 (one day past the deadline)…I don't recall seeing any information about effective hours for registration–just the date.

I'm betting that we have many local LO's who have not yet taken the steps necessary to originate mortgages in Washington State in 2009–just over a month away.

HoldingbreathThe NMLS site is…well I can't think of any pleasant ways to describe it–it seems very unorganized and unclear.  Plus the buttons/links are not easy to find.  My advice to you is to not delay any further.  If you think you've registered, you may want to visit the site to verify and to be sure that you have "renewed"  your license for 2009.  I know some are hoping that there will be an extension granted for loan originators…but I certainly wouldn't hold my breath.

Good luck!  I'd love to hear from you via commenting below.

Check out my related post at Rain City Guide where I interview Jillayne Schlicke about The SAFE Act.

Filed Under: Legislation

How to Read a HUD-1 Settlement Statement

November 17, 2008 by Leave a Comment

UPDATE: Sadly when First American Title decided to absorb their brands in the greater Seattle area, including The Talon Group, they decided to remove many of the great videos Talon created leaving voids in several of my blog post. My apologies!

EDITORS NOTE:  Although the HUD-1 Settlement Statment was modified in 2010 with the Good Faith Estimate, this video still is a good review of what to expect at your closing appointment. 

The Talon Group has created another video.  This one explains how to read your estimated HUD-1 Settlement Statement.  This is the document that includes all of your costs, fees and credits involved with your real estate transaction. 

Ideally, your Good Faith Estimate should correlate closely with your estimated HUD-1 Settlement Statement.  I encourage borrowers to bring their good faith estimate with them to closing and (even better) request a copy of your estimated HUD at least 24 hours prior to your appointment at the escrow company.  In order for your closer to be able to do this, the lender will need to provide them documents in a timely manner…and there's nothing wrong with that!

Watch for a new HUD and Good Faith Estimate that was just approved and will be in effect January 2010.

Related post:

Before you go to your signing appointment

Why is my payoff higher than the principal balance?

Filed Under: Escrow and closing

Sunday Drive to the Tri-Cities: Washington’s Wine Country

November 16, 2008 by 4 Comments

Cari_2Editors Note: This Sunday Drive is brought to you by Cari McGee who knows her way around Richland, Kennewick, Pasco and surrounding towns as a Realtor in the Tri-Cities for Windermere.  Cari is also the author of The Real Estate Blog by Cari McGee.

Now that gas prices are back at feasible levels, you should think about taking a drive over to the OTHER side of our fair state.  The Tri-Cities (3-4 hour trip by car, depending on how fast you drive and what the traffic on the Pass is like) is a great place to spend a peaceful Sunday afternoon. [Read more…]

Filed Under: Real Estate Agents, Sunday Drive - Neighborhood Tours, Washington Cities Tagged With: , , , , , ,
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