Friday Funny

Regardless of our opinion of Ben Bernanke, I’m sure you’ll find this spoof of "Every breath you take" comical.   

Ben, we’ll be watching you Tuesday, September 18.

Hat tip to Calculated Risk.  (I’m not sure if this was an ad (for CBS) at the bottom of their page or if they posted this video there.   Regardless, it made me chuckle).

Zipping the Scales

Obesityzipcode0912finalx_3I found this article by the Seattle PI very interesting.   Before moving to West Seattle (10-14% obesity zip code), I lived on North Lake in the West Hill neigh- borhood of Auburn (a more than 25% obesity zip code).   

Living at North Lake meant that I planned my groceries because it was a bit of a trek to make it to QFC (which is now gone).  The produce and meats were pretty good quality.   The neighborhood also had other low cost grocery stores.  I felt that QFC, at the time, offered the highest quality.   There was (is?) a Trader Joes, for some reason, I didn’t shop there.

Living in West Seattle, we currently have several grocery stores, including Metropolitan Market and PCC.   Whole Foods is coming soon (it’s rumored that Trader Joes will follow).    With so many stores, I find myself shopping for groceries every day for that nights meal.   The grocery store is an almost retreat like a pleasant break in my day.   Metropolitan Market has great samples of cheeses and the kiosk is always cooking up something great.   The produce and meats are very fresh.   (When I lived in Des Moines, I loved going to the local butcher, B&E Meats over the grocery store). 

Where my home was located in West Hill Auburn, we had a lot of Weyerhauser walkers (North Lake is next to Weyerhauser’s corporate headquarters)…admittedly, I was not one of them.   I do get out and walk more living in West Seattle.  In fact, this is a much more "active" neighborhood than my former.   You have to be mindful opening your car door or you just might nail a bicyclist.   Joggers, walkers and people with strollers cover the sidewalk.   

The study, which followed 9000 King County residents boils down to:

  • Access to fresh healthy foods.
  • Cost of fresh healthy foods and organics compared to canned and other processed foods.
  • Education about different types of food and reading labels.   One example in the article which surprised me, is that raisin bran was less healthy than frosted mini-wheats.
  • Walkable neighborhoods (sidewalks, safety, etc.)

To read the entire article, click here.

UPDATE:  Hat tip to Lisa Wallace-Baker who just told me about Walk Score which "grades" how walkable your neighborhood is.   My West Seattle neighorhood scored 32 out of 100 and my former Auburn scored a 15.

Family Opportunity Mortgage…now at Mortgage Master Service Corporation

The Family Opportunity Mortgage helps families who are buying or refinancing homes for college students, elderly parents and disabled adult children.   Without this program, these transactions would often have to be considered as “investment properties” with higher interest rates and closing costs.   Now, it can essentially be treated as a primary residence.

[Read more…]

Lady Liberty returns to Alki on 9/11

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Should I refi my VA loan?

A gentleman from Bremerton called me wondering if he should refinance out of his VA adjustable rate mortgage.   The start rate is 5.125%, however it’s scheduled to adjust in a few months.   VA ARMs (and FHA) have the best caps available at 1%.  The most his ARM could adjust worse case scenario would be to 6.125%.   And his VA loan does not have any mortgage insurance (unlike an FHA loan, which could possibly justify refinancing).

He’s also considering possibly selling in a year or so. 

The adjusted rate is very close to what I could currently offer him with a new conventional loan (a new VA loan would provide a higher rate).   If he was considering living in this home "forever" and the thought of having an adjustable rate mortgage was causing him emotional grief (low risk tolerance); then I might recommend a different strategy.

His estimated mortgage balance is $224,000.   I did not ask if the existing ARM is a 3 or 5 year fixed (I was driving during our conversation).    Here’s some figures to consider:

  • Worse case adjusted principal and interest payment for 5/1 VA ARM @ 6.125% = $1460.40 (amortized for 25 years). 
  • Worse case adjusted principal and interest payment for 3/1 VA ARM @ 6.125% = $1378.97 (amortized for 27 years).
  • Conventional mortgage refinance (assuming 80% loan to value; which offers a better rate than a VA 30 year fixed) principal and interest payment @ 6.000% based on a loan amount with closing costs financed: $1378.40. 

If the VA borrower has the 5/1 ARM scenario, it would take him just over 4 years to break even on the closing costs of the new refinance.   If the VA borrower has the 3/1 ARM scenario, it would take over 9 years to break even using the conventional refinance.   

What would you recommend?

A Near Perfect Storm: The US Housing Market

Perfect_storm_1796069_2Washington Mutual’s Chairman and CEO, Kerry Killinger, referred to the U.S. housing market as "a near perfect storm".

Killinger said at a a Lehman Brothers financial services conference:

"the combination of rising delinquencies, higher foreclosures, more housing inventory, increasing interest rates on many mortgages and greatly reduced availability of mortgages due to limited liquidity is creating what we call a near perfect storm".

On a side note, both Washington Mutual and Countrywide have been aggressive "dealers" in the Option ARM markets.   Washington Mutual’s flyer explaining Option ARMs states "It’s both easy and smart".   If you’re a reader of Mortgage Porter, you know I disagree.   Option ARMs are not easy and not smart for a majority of home owners.   

"Roughly 28% of Washington Mutual’s loans held are in these riskier option-ARM mortgage products, according to Plesser. By contrast, pay-option loans comprise more than 40% of Countrywide’s interest-earning assets".  According to this article in Business Week.

What should you do to weather out the storm?  Be prepared.  Have a plan.   Contact your Mortgage Professional today

More good news from Talon Title

Another memo showing how The Talon Group is stepping up to the plate during these historic times in our industry for their previous clients:

"Starting today through February 2008, The Talon Group is lowering its residential refinance escrow fee to $375 for returning borrowers who have previously closed with either The Talon Group or Escrow Partners Inc.  We are also offering a discounted escrow fee of $275 for refinances of stand-alone second mortgages.

The Talon Group is committed to easing the pain for our past borrowers needing to lower their payments or reorganize their finances.

In addition to lowering our refinance escrow fees, The Talon Group is also offering an additional 10% off the refinance title premium for returning clients or new borrowers who provide us with their previous title policy or commitment.

We are keenly aware of your efforts to help your past clients deal with these turbulent times. As a member of your team, we want nothing more than to help you succeed.

The Talon Group’s superior databases and technology allows for greater communication and efficiency throughout the entire escrow process.
All discounts apply to 1-4 family residential properties only. The escrow order must be opened with The Talon Group between 9/10/07 and 2/28/08 to qualify for above discount. "

I just love to share some good news.  Group hug?

Go Hawks!

Dsc_0166Seahawks…that is! This Seahawk happens to be an Osprey.