Look out Loan Originators: “No More Mr. Nice Guy”

October 25, 2007 by Leave a Comment

I attended the WAMB breakfast on Wednesday which featured Deb Bortner, Director of Consumer Services for DFI.  The room was filled with anxious mortgage brokers as we listened to her update on licensing and the State’s plans to add more regulations to those of us who are employed at with companies who have the ability to broker mortgages.

Deb Bortner stated "no more Mr. Nice Guy" if a LO has not passed the state required exam by the end of this year, they will not be permitted to take practice their business until they’re licensed.  As of October 1, 2007, out of the 15,000 individuals who applied to be Licensed Loan Originators, 3261 have passed the LO competency exam.   Simple math tells you that there will not be 15,000 Licensed Loan Originators in Washington state by December 31, 2007. 

I believe that we’re going to see a significant reduction of LOs who are employed at a Mortgage Broker, especially if they’re "part time" or just not committed to their field.  I’ve heard of someone being very frustrated with the process from fingerprinting not working (20% of the fingerprints are rejected and to be retaken…I had the pleasure of being printed 3 times) and deciding that this was too much of a hassle.    This is raising the bar of entry to work for a Mortgage Broker and there’s no wrong in that.

Some will be intimidated by the exam or may not pass it the first time and may decide they should make an employer change (work for a mortgage company not regulated by DFI, such as a large bank mortgage company).   

The LOs who depended on subprime mortgages to make a living are now out of luck.  If they’re not willing to learn conforming programs and/or if their company is not an approved FHA lender, they have less options and therefore, their paychecks are pinched.    Many will become frustrated by the current mortgage landscape and decide to bail out all together.   And of course some LOs will discover themselves laid off.

At the last few industry gatherings I’ve attended, I’ve noticed fewer "slick salesy" LOs and more Mortgage Professionals–people I’m proud to be associated with.

More to follow on other topics that were discussed at this meeting including a proposed state bill to regulate "non traditional mortgages".

Filed Under: Legislation

Picking your next mortgage by rate shopping? You might as well be playing Liar’s Poker.

October 23, 2007 by 8 Comments

Poker_2

Rate shopping to select who will be assisting you with your next mortgage is similar to playing “liars poker”.  The Loan Originator who is the most successful at bluffing wins.  The fact is, unless you’re locking in the rate at the moment you’re shopping, you don’t have that rate.  It’s a rate quote–that’s all. Mortgage rates change throughout the day.  They are based on mortgage backed securities: bonds.   Some lenders I work with offer “live pricing” and others issue rate sheets; sometimes we can have several rate sheets offered by a lender during one day.

[Read more…]

Filed Under: Financial Planning, First Time Home Buyer, Interest Rates, Mortgage, Predatory Lending, Refinance, Residential Purchase

Please Don’t Neglect Your Unhealthy Mortgage

October 22, 2007 by Leave a Comment

ErToday I received a phone call from a CPA who was trying to help her clients who have a “toxic mortgage”.   She was hoping I would be able to save them…there was a time that I probably could perform a “rescue”.   In fact it was just a few months ago before the current mortgage melt down.   Believe it or not, when applied correctly, subprime mortgages could mean the difference of someone being able to save their home assuming they were able to be disciplined enough to keep (or get) their finances healthy.  This family will not qualify for FHA or FHASecure (they don’t have an ARM that’s adjusted).   What they need is a subprime (now known as “non-prime”) mortgage to buy them a little time.   Now their time is running out. [Read more…]

Filed Under: Credit & Financial Strategy

What Happens When I Leave my Husband and Kids Alone for Dinner

October 20, 2007 by 7 Comments

On Monday evening, I had the extreme pleasure of going to Assaggio Ristorante in Seattle for a dinner I had bought at the Explorer West auction last year.   The very charming Proprietor, Mauro Golmarvi, was doing a personal cooking demonstration Dsc_0001_2for the parents who "bought in".  I’m "the cook" in our household so this means that my husband and kids were going to have frozen pizza for dinner (they love the stuff)…it also allowed my husband to do something he’s been waiting to ever since we moved into our current home: cut a hole in the kitchen wall.   

Our home was built in 1928 and the kitchen is a bit closed off.   We’ve discussed opening up the wall between the kitchen and dining room, which would be a nice improvement and allow the cook (me) to be more social when we have guest.   My thoughts were to wait until we could get the entire job done, see what pipes are behind the wall (yeah, that’s a sink in the photo; there’s bound to be some plumbing)…and to Img_6004 not have the house messed up during the holidays.   Armed with a steak knife, my dear husband went to work on opening up the kitchen wall.   What did he find?  Pipes!  His earlier thoughts that we could either move a single pipe or, if it looked decent, we could leave it exposed…this is not going to work! 

When I returned home from my delightful dinner, I was quite surprised to find a large picture (that was hanging elsewhere) over the sink covering the newly exposed pipes.   

I love my husband.

By the way, I highly recommend Assiaggo Ristorante and their cookbook, Mauro’s Passion.  If you have a group function…consider booking Mauro at the restaurant for a private cooking lesson.   The restaurant is beautiful with frescoes on the ceiling and Mauro makes you feel at home.   The food is outstanding and Mauro is a wonderful host.

Filed Under: Just for Fun, Seattle

Conforming Loan Limits will not be reduced through 2008

October 18, 2007 by Leave a Comment

There has been quite a bit of speculation that the conforming loan limit might be temporarily increased before the end of the year to try to provide some relief for the jumbo market (loans over $417,000 for single family dwellings).    OFHEO has announced that the conforming loan limit will not be reduced through 2008. 

In our region, you’re probably reading this say, "Duh! Of course the loan limit shouldn’t be reduced".  Nationally, homes are depreciating.  Our home values have been less volatile than other parts of the country.    Conforming loan limits are set based on a certain percentage of the national home prices. 

"The conforming loan limit is adjusted annually through a calculation of year over year changes to the existing level of home prices based on data from the Federal Housing Finance Board’s Monthly Interest Rate Survey (MIRS)". 

In late November, OFHEO will announce the 2008 conforming loan limits.  There is still a possibility that loan limits may be temporarily increased.   Congressman Barney Frank, Chairman of the House Financial Services Committee, would like the conforming loan limits to be temporarily lifted to $625,000. 

OFHEO is now seeking additional comment on the revised guidance within 30 days of its publication in the Federal Register.

I have a suggestion for OFHEO, why not allow loan limits to be factored on a county basis instead of national?  This system seems to work just fine for FHA loan limits. 

Filed Under: Mortgage

You don’t need 20% down to buy a house: 100% and 97% LTVs

October 17, 2007 by 2 Comments

In light of the tightening guidelines in the mortgage industry, I can understand how a consumer might think they need to save up a hefty down payment to purchase a home.   The fact is, there are many programs available that allow minimum down payments.   Here’s a small sample: [Read more…]

Filed Under: Mortgage Programs

Ballard’s Farmers Market

October 15, 2007 by Leave a Comment

Yesterday we found ourselves walking through Ballard through the Farmers Market and having a late brunch at Hattie’s Hat (I recommend their Migas).  It was a near perfect weekend: a sunny 65 degrees with autumn leaves.  Img_5952

Filed Under: Just for Fun

October is National Breast Cancer Awareness Month

October 14, 2007 by Leave a Comment

This is the time of the year when open enrollment for benefits takes place with many employers.   Considering this, I asked Jean Christensen from AFLAC to share a story with you regarding one of the benefits of AFLAC.   Jean shares a story of Michele, one of her co-workers who was diagnosed with breast cancer a few months ago.

I am a 40 year old mother of two, wife of one and friend of many.  As of July 9, 2007 my life was changed radically as I was diagnosed with breast cancer and bone metastasis.  One year earlier, I’d had a clear mammogram.  At that point I had to stop working as an Associate of AFLAC, have others cook and clean for my family and drive me everywhere. I went from being totally in charge of my life to being totally dependent on others for everything.

Now a one income family, in a hugely stressful situation, with the same monthly bills like mortgage, food, heat, cable, etc., who did we have to turn to?

Thankfully in 2003, I enrolled I the AFLAC Cancer Plan for $36.00/month.  Our first check from AFLAC was $7,000 upon my diagnosis and I know that the checks will keep on coming as I’ve seen over and over for others.  AFLAC’s average cancer payout of $40-$60,00 is life changing.

I tell you this story not to scare you, but to share with you my story.  I continue to fight the fight. 

The financial help that AFLAC brings is enormously comforting.  If you choose to participate in one plan, please, look at the statistics, hear this story and consider the cancer plan.

-Michele H., Woodinville– willingly shared with Jean Christensen and you.

AFLAC has been a great benefit to the employees at Mortgage Master.   My first processor is battling Stage 4 breast cancer and I know that AFLAC has been a significant help to her and her family.

I have enrolled in AFLAC and Mortgage Master is able to offer a Flex Spending program because of their participation.   

When you’re reviewing your options during benefits enrollment with your employer, please make sure you understand your options.   Hopefully you never need insurance or AFLAC…but you’re certainly glad that you have coverage when the unexpected happens.

If you’re employer does not offer AFLAC, or if you would like to learn more, please contact Jean Christensen at 206-819-8704.

Filed Under: Financial Planning
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