The Mortgage Porter

The Attack of the Dreadful Halloween Desk

Who What is this horrific being?  It was noticed lurking around the office of Talon Title and Escrow today at their Bellevue location.

Why it's none other than Tim Daniels, Talon's Chief Title Officer.    He's been missing for over two weeks!   Every Halloween, his desk attacks him leaving him buried alive and wounded with nasty paper cuts.   You can see the joy and relief in his co-workers expressions that Tim has been safely recovered.   Happy Halloween!

Happy Halloween

I am just returning from a ferry ride to and from Vashon Island where I met with a couple getting ready to buy a home together. Vashon Island is getting ready to close their main street so that all the little tricker treaters can safely rule to roads as they gather their goodies. In fact, I was very honored to have a Power Ranger sit with us during the loan application! I was really hoping to have a nice fall photo from the ferry...but fog had us socked in as far as the view is concerned!

My computer problems are haunting.

I've had spooky computer problems this past week.  My lap top has expired, may it rest in peace (or pieces by the time I done with it).   My new computer should be arriving by Halloween.   If you have sent me an email  and I have not responded, it very well be due this issue. Please call me or use rhonda@mortgageporter.com instead.   We also decided to replace our antique desk top at home and have made the switch to a Mac (my laptop is not since I need Windows XP Pro for work).     Currently I'm using a "loaner" lap top from my gracious employer.   

I'll be glad when the transition to the new computers are complete!  This entire process is making me feel like a witch!

By the way, if you're on my Mortgage Market Guide Weekly email list...you can obtain a copy of the newsletter here.  My email database is down and out until I have my new lap top up and running.

Short-term housing for displaced families in Southern California

Dustin Luther, Rain City Guide Creator, recently did a post about emergency short-term housing for families who have lost their homes due to fire and the Santa Ana winds in Southern California.   

I lived from Auburn, California...to Agua Dulce, Canyon County and Chula Vista before returning to my home in Washington for a couple of years with my Dad when he was opening parks for Thousand Trails many years ago.   It's heart breaking to see the detestation.   

I don't know how many readers I have in California...but just in case I do...or if there's someone who knows someone, Dustin is trying to get this information out to help those in need...please spread the word.

Mortgage Interest Rates for Friday Morning

Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties).  Conforming rate quote below based on owner occupied, "full doc" with minimum credit scores of 680 with an 80% loan to value or lower and a loan amount of $400,000.   Rates quoted are priced based on a 45 day lock with 1 point and there are no prepayment penalties on any of the rates quoted below. 

30 Year Fixed: 5.875% (APR 6.011%).  Payment per $1000 = $5.92. 

30 Year Fixed with 10 Year Interest Only:  6.250% (APR 6.263%).  Payment per $1000 = $5.10. 

40 Year Fixed:  6.375% (APR 6.517%).  Payment per $1000 = $5.77. 

5/1 ARM (2/2/6 caps):  5.500% (APR 7.015%).  Payment per $1000 = $5.68. 

5/1 ARM 10 Year Interest Only Payments:  5.500% (APR 7.055%).  Payment per $1000 = $4.58. 

FHA/VA 30 Year Fixed:  6.375% (APR 7.020%).  Payment per $1000 = $6.24. (not including MI for FHA).

JUMBO (Non-Conforming) Rates.   Pricing is based on the same criteria above, with the exception that the loan amount is $417,001-$650,000 (20% down).  

30 Year Fixed: 6.500% (APR 6.669%).  Payment per $1000 = $6.32.   

30 Year Fixed with 10 Year Interest Only Payments: 6.625% (APR 6.769%).  Payment per $1000 = $5.52.   

5/1 ARM:  6.125% (APR 7.254%).  Payment per $1000 = $6.08.

5/1 ARM Interest Only:  6.125% (APR 7.278%).  Payment per $1000 = $5.10.

Please do not select your Mortgage Professional by interest rates alone and do not shop rates by APR.    This is just a small sample available of rates and products.  Rates are as of Friday, October 26, 2007 at 9:30 a.m. and may change at any time.  Available programs may change at anytime as well.   This is not a guarantee nor is it a commitment of interest rate.  For your personal rate quote or for loan amounts over $650,000, please contact me.

Look out Loan Originators: "No More Mr. Nice Guy"

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".

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

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 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. 

So if you call Loan Originator "A" on Thursday morning for a rate quote, Loan Originator "B" on Thursday evening and then Loan Originator "C" on Friday; assuming they all price their loans equally (all make the same amount of money on your mortgage) you could receive three different rates.   This is assuming that the LOs are all cut from the same cloth.   What if the three rates you're shopping are with three different types of Loan Originator?   

Loan Originator "A" talks a great talk...however when you have questions on your mortgage, they're on the golf course or just out of reach...maybe they just are a "part timer".  You deal with the processor once you're in transaction or just never hear from them until closing.  Loan Originator "A" does not dedicate any time or effort to staying up to date on program changes, guidelines or new products.    "A" does not consider a mortgage plan or care if to stay in touch with you after your mortgage closes.  "A" too busy quoting the lowest rate to their next transaction. 

Loan Originator "B" may not be as polished as "A" however, "B" is equipped with knowledge and many resources for your mortgage.   "B" wants to make sure that borrowers understand their mortgage and arrive at the signing table feeling comfortable with such a large and serious transaction.  "B" reviews the settlement statement before the borrowers see to make sure that it actually matches the Good Faith Estimate "B" provided to the borrowers.  Loan Originator B cares more about establishing a long term relationship with their clients so they will continue to rely on "B" for their mortgage and financial needs beyond when the transaction is closed.

Loan Originator "C" is slippery smooth.  "C" does not have all the programs available but will cram borrowers into what they do have...they don't want to miss a buck.   "C" will sneak in a prepay to pad C's pockets...too bad the borrower will not discover it until they're at escrow and 90% of them will proceed with the mortgage anyhow.  And if you don't qualify for your mortgage, "C" will find a way to get you approved for a loan you cannot afford at any cost.  "C" will claim to beat any rate and the offers seem too good to be true.   Loan Originator "C" may be a gambler, too...even if you think your rate is locked, they may be playing to market hoping to make some extra dough on the back end.

You can also have three great LOs, what  I like to call Mortgage Professionals, but they work for three different types of mortgage companies such as a bank, broker, correspondent lender or credit union.  This can impact your rate, available mortgage programs and what their specific procedures are.   Most importantly is the caliber of the individual.  If a Mortgage Professional does not have a specific program available, such as FHA, they will be honest with the borrower and let them know instead of "selling" a different program so they can be compensated.

There is so much more to your mortgage than the rate alone.  If you like to gamble, than go ahead an make your decision about the largest and important investment you may make based on a rate that you don't even have unless it is locked. Your Good Faith Estimate is no guarantee of rate or closing costs.

If gambling is not your style (it's certainly not mine), then I suggest researching the person and company who will be providing your mortgage strategy, helping select your product and secure your rate.   If you're done your homework, a competitive rate will be included automatically...it's in the cards. 

Related Posts:

• Why Selecting a Lender by Rate Alone is Not in Your Best Interest
• 5 Steps for Shopping Mortgage Interest Rates
• Second Opinions On Good Faith Estimates
• What's Wrong with Calling Lenders for Rates?
• How to Pick a Lender

Please Don't Neglect Your Unhealthy Mortgage

Today 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.

Part of their problem began with working with an unsavory loan originator who is now out of the business.   The LO brokered their loan to a subprime company I would not work with.  (Even though we're approved with around 80 lenders, give or take depending on the day, I tend to select 5 preferred prime lenders and 3-5 subprime/alt-a...this lender was not on my list of preferred). 

Shortly after closing, their lender informed them that they did not have home owners insurance...they did.  They provided documentation showing their insurance to the lender.    The lender did not respond and instead, ordered insurance for them at a hefty price...jacking up their payment beyond what they can afford.   Now they're sliding down a very slippery slope and the lender is not cooperating.   They are behind on their mortgage a couple months.  They called out for help too late.   

NOTE:  Other lenders may be more willing to cooperate with homeowners...you need to act quickly and contact your lender if you're having difficulty with your payment. 

Homeowners:  the very moment you think you may be having trouble with your mortgage or debts, please contact your Mortgage Professional right away.   If you don't have one, you can always contact your CPA or other trusted financial advisor for a referral.   Please don't wait until you have a "mortgage emergency"...get help, even if you just have the sniffles.

Trusted Advisors (Real Estate Agents, CPAs, CFPs, etc): Please keep an ear out for your clients who may have adjustable rate mortgages or are may be having difficulites with their mortgage payment.   Even if an ARM isn't scheduled to adjust for 12 months or more, the sooner someone meets to with a Mortgage Professional to make sure their credit and everything else is in line to restructure the mortgage (if needed), the better for all.

All home owners should meet with their Mortgage Professional at least annually to have a "mortgage check up" or Annual Review.   This is a service that I provide to my clients.  I'll provide more information about the Annual Mortgage Review in a separate post.   

My point is, the more time you allow yourself to fix a "sick" mortgage situation, the better your odds are of finding a cure.

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

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 for 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 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.

Mortgage Interest Rates Heading Lower

Rates have improved significantly today with the sell off in the stock market.  The change from last Friday's rate is shown in parenthesis.   Check out the much improved Jumbo rates and conforming 30 year fixed is under 6%!

Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties).  Conforming rate quote below based on owner occupied, "full doc" with minimum credit scores of 680 with an 80% loan to value or lower and a loan amount of $400,000.   Rates quoted are priced based on a 45 day lock with 1 point and there are no prepayment penalties on any of the rates quoted below. 

30 Year Fixed: 5.875% (APR 6.011%).  Payment per $1000 = $5.92. (improved 0.25%).

30 Year Fixed with 10 Year Interest Only:  6.125% (APR 6.263%).  Payment per $1000 = $5.10. (improved 0.125%).

40 Year Fixed:  6.375% (APR 6.517%).  Payment per $1000 = $5.77.  (improved 0.125%).

5/1 ARM (2/2/6 caps):  5.500% (APR 5.633%).  Payment per $1000 = $5.68. (improved 0.25%).

5/1 ARM 10 Year Interest Only Payments:  5.625% (APR 5.759%).  Payment per $1000 = $4.69. (improved 0.25%).

FHA/VA 30 Year Fixed:  6.375% (APR 7.020%).  Payment per $1000 = $6.24. (not including MI for FHA). (improved 0.125%).

JUMBO (Non-Conforming) Rates.   Pricing is based on the same criteria above, with the exception that the loan amount is $417,001-$650,000 (20% down).    

30 Year Fixed: 6.500% (APR 6.669%).  Payment per $1000 = $6.32. (improved 0.5%)!

30 Year Fixed with 10 Year Interest Only Payments: 6.625% (APR 7.779%).  Payment per $1000 = $5.52. (improved 0.5%)

5/1 ARM:  6.250% (APR 7.305%).  Payment per $1000 = $6.16. (improved 0.375%).

5/1 ARM Interest Only:  6.250% (APR 7.306).  Payment per $1000 = $5.21. (improved 0.375%).

Please do not select your Mortgage Professional by interest rates alone and do not shop rates by APR.    This is just a small sample available of rates and products.  Rates are as of Friday, October 19, 2007 at 10:30 a.m. and may change at any time.  Available programs may change at anytime as well.    This is not a guarantee nor is it a commitment of interest rate.  For your personal rate quote or for loan amounts over $650,000, please contact me.