The Mortgage Porter

Poll Results: Should I Post Weekly Rates with a Point?

The results from the poll are in and in a nutshell, those who participated voted 2 to 1 in favor on posting rates without any points (discount or origination).    I'll continue to stay on that course at Mortgage Porter and if the benefit of paying a point for a rate is more than 0.25% to rate, I may make mention of it.

Thanks to those of you who participated in the poll!

Mortgage Professionals: Don't Miss Out on DFI's Next Rulemaking Meeting

On Wednesday, July 2, 2008 at Renton City Hall from 1:30 - 3:30 p.m., there will be a Rulemaking Meeting regarding SHB 2770's Disclosure Form.   This is a form that's required to be provided from certain loan originators prior to a consumer completing a loan application effective June 12, 2008.  If you think a loan package for an application all ready wastes a tree, you can expect more paperwork and disclosure forms on top disclosure forms thanks to our elected officials who just want to make sure you really do understand your mortgage (hint, if you don't understand your mortgage...you probably need to be working with a different mortgage originator).

Click here to see DFI's sample form.

Take a Sunday Drive to Queen Anne

This week's Sunday Drive is brought to you by husband and wife team David and Karen Bell, Associate Brokers from ReMAX Metro.   Be sure to check out their blog Seattle Real Estate Bells.

Just north and west of downtown Seattle lays one of the most popularly of all Seattle’s neighborhoods, Queen Anne.  Queen Anne Hill was developed in the late very 1890’s and early 1900s, at about the same time as North Capitol Hill, but generally with smaller homes.  Later, in the 1910’s and 1920’s, many larger homes were built on Queen Anne’s South Slope because of magnificent views of Elliott Bay and Mt Rainier. Today that south facing view includes the spectacular view of downtown Seattle.  Queen Anne is renowned for its extraordinary architecture that includes many fine examples of Queen Anne, Craftsman, Bungalows, Seattle Box, and later, Colonial styles of architecture. The highest hill in Seattle, Queen Anne rises 456 feet above Elliott Bay.

Many people know Queen Anne as the home of Kerry Park, with its incredible views of the city and Puget Sound. Queen Anne offers simple pleasures such as lazy morning strolls to admire the beautiful homes and gardens, as well as sophisticated amenities like fine dinning and an exciting variety of specialty shops. In the past 30 years Queen Anne has become one of the most desirable and expensive neighborhoods in the city. Queen Anne is arguably the most centrally located neighborhood in the city and it is literally just minutes to downtown…or for that matter just about anywhere you want to go.  With all the traffic snarls Seattle has, Queen Anne is just minutes to Highway 99 (Aurora) and I-5, making getting just about anywhere very easy.  For the frequent traveler, they simply drop down to Highway 99 and in 20 minutes they will be at the airport.  Queen Anne is a delightful walking community…and a great place for a Sunday Drive!

While in Queen Anne, David and Karen Bell recommend that you try The 5 Spot for breakfast and if you like Thai food (who doesn't?), Orrapin Thai Cuisine on the corner of Queen Anne Avenue and Boston.

Join Me Tuesday at Rain City Radio featuring The Tim (aka the Seattle Bubble)

Once again we have a great show lined up at Rain City Radio, featuring "The Tim" who author and moderates The Seattle Bubble blog.  It should be a very interesting conversation and you are welcome to join the RCG panel.   For more information, click here.

I will update this post as more information becomes available.

Update:  Click below to listen to the interview with Tim Ellis from Seattle Bubble.  This is a great interview that expands beyond "the bubble" and also discusses blogging, and Tim's Naked Loon.

Issues with Changes to the Estimated Settlement Statement after Signing

A Seller from Battleground, Washington sent me this question regarding how their closing cost contribution was treated with the Escrow Officer:

I recently sold my home and...I was to pay up to 6% of buyers costs. I was presented with good faith estimate of costs two weeks prior to closing, everything looked fine. We signed our documents at closing and carefully reviewed and signed the HUD-1 [Settlement] Statement.  The deal was recorded the next day and we were wired the money as noted on our documents minus around 3025.00.  We called escrow officer and she said that there was a problem at closing and she added a FHA-MIP charge to the hud-1 statement because we agreed to pay up to 6% of buyers costs in our sale documents. She did not notify us or even attempt to notify that she added this change to the hud-1 document and closed anyway.  Is that a legimate thing that can happen at closing?  It seems very very wrong to me...

Let me begin by saying that it does feel wrong.  The Escrow Officer should have called you immediately to let you know of the change to your Estimated HUD-1 Settlement Statement. It's very poor service from the escrow company at the very least. 

Unfortunately, the Estimated HUD-1 Settlement Statement is just that: an estimate.  And when purchase and sale agreements are written with the Seller to pay up to a certain amount instead of a specific dollar amount, then it is the responsiblity of the lender to make sure that as much of the closing cost credit is used per the buyer's loan guidelines.  Obviously there was a lack of communication with your transaction between the mortgage and escrow company to have this last minute change to your HUD happen.

You may want to review your escrow instructions (you would have signed them at closing too) which probably have language stating that the escrow company has the right to modify the Estimated HUD-1 Settlement Statement at any time.

You did everything correctly as far as reviewing the Good Faith Estimate and seeing what costs were being paid.  When you agree to pay "up to" a certain percentage, the Seller needs to be prepared to have that entire amount used.  When I have a closing cost credit from a Seller, we use as much as possible to pay for allowable closing costs and possibly buy down the buyer's interest rate. 

I suggest contacting the manager of the escrow company and the real estate agents to let them know about your displeasure with your closing.      

This Morning's Mortgage Interest Rates dedicated to Bill Gates

UPDATE:  Rates have improved by approx. 0.125% since this post due to investors seeking the safety of bonds (the stock market continues to be stinky).  Check out updated rates at my Rain City Guide post.

Since this mornings rates are for the most part unchanged from what I posted late last Friday afternoon at Rain City Guide, it's real easy for me to post with and without points.   Today Bill Gates "logs out" and officially retires from Microsoft.  As a tribute to this amazing person, I'm "dedicating" this post to him and you'll find a fun video on his retirement at the end of this post.

Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties).  The conforming rate quote below is based on owner occupied, "full doc" purchase with a sales price of $500,000 and a loan amount of $400,000.  This scenario includes reserves (taxes & insurance) not being waived.   Rates quoted are priced based on a 30 day lock with no origination or discount points and there are no prepayment penalties on any of the rates quoted below. 

30 Year Fixed @ 1 Pt:  6.250% (APR 6.410%)  ~ Priced @ 0 Pts:  6.500% (APR 6.566%). 

30 Year Fixed with 10 Year Interest Only @  1 Pt:  6.500% (APR 6.648%) ~ Priced @ 0 Pts:  6.750%  (APR 6.686%).

15 Year Fixed @ 1 Pt:  5.875% (APR 6.135%) ~ Priced @ 0 Pts: 6.1250% (APR 6.201%)

5/1 ARM - LIBOR @ 0 Points: 6.000% (APR 7.104%).  Priced @ 1 Point: 5.625% (APR 7.051%)

Conforming-Jumbo Rates. Pricing is based on the same criteria above (including zero points) except where the loan amount is $417,001 - $567,500 for properties in King, Snohomish or Pierce Counties.  (For other conforming-jumbo loan limits in Washington state, click here); specifically priced for a sales price of $650,000 and a $520,000 loan amount.

30 Year Fixed @ 1 Pt:  6.375% (APR 6.681%) ~ Priced @ 0 Pts: 6.625% (APR 6.681%) 

30 Year Fixed with 10 Year Interest Only @ 0 Pts:  7.000% (APR 7.060%).   Priced @ 1 Pt:  6.750% (APR 6.893%)

5/1 ARM - LIBOR @ 0 Pt:  6.000% (APR 7.089%) ~ Priced at 1 Pt: 5.625% (APR 7.036%)

JUMBO (Non-Conforming) Rates. Pricing is based on the same criteria above (zero points), with the exception that the loan amount is $417,001-$650,000 (20% down).   The specific scenario used to price the rates below is a sales price of $850,000 with a loan amount of $680,000.

30 Year Fixed @ 0 Pt:  7.875% (APR 7.936%)

30 Year Fixed @ 1 Pt:  7.500% (APR 7.656%)

FHA.  Pricing based on credit score of 620 or better and loan amount of $362,790 for FHA in King, Snohomish and Pierce Counties with 1 discount/origination point.

30 Year Fixed @ 1 Pt:  6.375% (APR 7.158%). 

FHA-Jumbo. Pricing based on 1 discount/origination point and loan amounts from $362,791 - $567,500 for King, Snohomish and Pierce Counties.  For other loan limits in Washington State, click here. 

30 Year Fixed @ 1 Pt: 6.500% (APR 7.258%)

VA. Pricing based on credit scores of 620 or better based on loan amount of $417,000.   For VA loan amounts over $417,000, please contact me.

30 Year Fixed @ 1 Pt:  6.375% (APR 6.700%)

Prime Rate (what HELOCs are based on):  5.000%

Please do not select your Mortgage Professional by interest rates alone and do not shop rates by APR.  These programs all have the same closing costs so you can see APR is not a valuable tool.   

This is just a small sample available of rates and products.  Rates are as of Friday, June 27, 2008 at 8:00 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. 

Mortgage rates continue to be very volatile.  Major lenders are averaging 2 rate changes per day.  Stay tuned with what's going on in the market by subscribing to Mortgage Porter (upper left corner) and Mortgage Porter Twitter for live rate updates (click Follow). 

On a fun note, what is Bill Gates going to do with all his spare time after retiring from Microsoft?

Video: Bill Gates Last Day CES Clip

Will DFI stop Countrywide from providing Washington State Mortgages?

Washington State DFI just came down with a huge hammer on Countrywide with a plethora of charges, based on a sample of 600 hundred examined loan files, including (but no limited to):

• Charging higher fees and interest rates to borrowers of protected ethnicity than others with similar situations.
• Inaccurate reporting of HMDA.
• Good Faith Estimates and Federal Truth in Lending not provided within 3 days of application along with violations of other disclosure forms.

The State has also charged that Countrywide has understated their loan volume from 2002 - 2007 and are requiring Countrywide to pay $5,594,785.78 in back assessments.

If DFI's Deborah Bortner and Governor Gregoire have their way, Countrywide will have their license to provide mortgages revoked and be banned for 5 years from operating as a liscened consumer loan company in Washington State plus an additional $1 million in various fees and fines.

DFI's STATEMENT OF CHARGES and NOTICE OF INTENTION TO ENTER AN ORDER TO REVOKE LICENSE, IMPOSE FINE, ORDER RESTITUTION, PROHIBIT FROM INDUSTRY, AND COLLECT ANNUAL ASSESSMENTS, EXAMINATION FEES, AND INVESTIGATION FEES. Whew!

Governor Gregoire's  Press Release

Last but not least, Jillayne Schlicke's post at Rain City Guide:  What do Governor Gregoire's actions mean for local Countrywide employees and short selling homeowners?

I have to wonder with the pending merger with Bank of America, how this will be impacted?  Is it still valid?  (I believe that Countrywide will no longer be under the Consumer Loan Act once it becomes Bank of America).   This drama is far from over.

Catch Me Tomorrow at RCG Radio featuring the West Seattle Blog

Dustin Luther of Rain City Guide will be hosting Rain City Conversations at 4:00 p.m. PST on Tuesday, June 24, 2008. Our featured guest is non other than Tracy Record, Editor of the infamous West Seattle Blog.  I'm really looking forward to having the chance to actually chat with Tracy.   I have a very small neighborhood blog in West Seattle as well...I bow down and curtsy to WSB!   I do hope you join us at 4:00 p.m. PST to participate -- for more information, click here.

Dustin continues to line up the great guests and topics...plan on tuning in Tuesdays at 4:00 p.m.

Update:  Listen to a West Seattle Conversation featuring Tracy Record, Editor of the West Seattle Blog.   

Canceled PMI...Reinstated?

I was recently contacted by someone who was told by his credit union, BECU, that his private mortgage insurance was going to be canceled.  He even received new payment coupons with the reduced mortgage payment without the private mortgage insurance.   But just before he was getting ready to make that new mortgage payment, he received a letter dated June 9, 2008 from BECU that states:

Dear Customer:

A recent audit of your account revealed that the private mortgage insurance (PMI) was removed in error.  The loan to value (LTV) of your loan is currently 85.3% and PMI is required.

The PMI coverage has been reinstated and will continue without interruption.  Your monthly mortgage payment amount will be adjusted effective with the July 1, 2008 payment. 

We apologize for any inconvenience this error may have caused.  Please do not hesitate to contact us if you have any questions.

Sincerely,

MIP/PMI Administrator

Ouch!  Not only did they re-instate PMI after saying it was canceled, they didn't even bother to use the customer's name in the letter. 

The property is located in Pierce County.  My best guess is that the lender (BECU) decided it was in a declining market and at the very last minute, re-evaluated the loan to value based on that.    Generally, it is up to the servicer (the lender) whether or not the private mortgage insurance can be canceled.   This is the first time I've heard of PM being canceled and then reinstated.

Mortgage Interest Rates - Improved

Update 1:20 pm:  Mortgage rates are unchanged; however I've posted rates at Rain City Guide both with and without points.

The stock market is off to a rocky start this morning with the DOW all ready down 120 points.  Investors are currently seeking the safety of bonds which is helping to bring mortgage rates lower.  The markets continue to be very volatile with several interest rate changes a day.   To see live rate quotes I'm providing, click here.

Just a reminder, I am now quoting conventional rates without any points (discount or origination) on the rates I'm posting at Mortgage Porter.  How you have your mortgage priced is up to you (points or no points).  Typically one point (one percent of the loan amount) equals 0.25% to interest rate. For your custom rate quote (priced however you want) for your residential property located in Washington State, please contact me.   Please be sure to "vote" how you would like to see rates posted on the poll to the right.

Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties).  The conforming rate quote below is based on owner occupied, "full doc" purchase with a sales price of $500,000 and a loan amount of $400,000.  This scenario includes reserves (taxes & insurance) not being waived.   Rates quoted are priced based on a 30 day lock with no origination or discount points and there are no prepayment penalties on any of the rates quoted below. 

30 Year Fixed @ 0 Pts:  6.500% (APR 6.566%). 

30 Year Fixed with 10 Year Interest Only @ 0 Pts:  6.750%  (APR 6.686%)

15 Year Fixed @ 0 Pts: 6.1250% (APR 6.201%)

5/1 ARM - LIBOR @ 0 Points: 6.000% (APR 7.104%).  Priced @ 1 Point: 5.625% (APR 7.051%)

Conforming-Jumbo Rates. Pricing is based on the same criteria above (including zero points) except where the loan amount is $417,001 - $567,500 for properties in King, Snohomish or Pierce Counties.  (For other conforming-jumbo loan limits in Washington state, click here); specifically priced for a sales price of $650,000 and a $520,000 loan amount.

30 Year Fixed @ 0 Pts:  6.625% (APR 6.681%) 

30 Year Fixed with 10 Year Interest Only @ 0 Pts:  7.000% (APR 7.060%).   Priced @ 1 Pt:  6.750% (APR 6.893%)

5/1 ARM - LIBOR @ 0 Pt:  6.250% (APR 7.244%).  Priced @ 1 Pt: 5.875% (APR 7.141%)

JUMBO (Non-Conforming) Rates. Pricing is based on the same criteria above (zero points), with the exception that the loan amount is $417,001-$650,000 (20% down).   The specific scenario used to price the rates below is a sales price of $850,000 with a loan amount of $680,000.

30 Year Fixed @ 0 Pt:  7.875% (APR 7.936%)

30 Year Fixed @ 1 Pt:  7.250% (APR 7.409%)

FHA.  Pricing based on credit score of 620 or better and loan amount of $362,790 for FHA in King, Snohomish and Pierce Counties with 1 discount/origination point.

30 Year Fixed @ 1 Pt:  6.375% (APR 7.158%). 

FHA-Jumbo. Pricing based on 1 discount/origination point and loan amounts from $362,791 - $567,500 for King, Snohomish and Pierce Counties.  For other loan limits in Washington State, click here. 

30 Year Fixed @ 1 Pt: 6.500% (APR 7.258%)

VA. Pricing based on credit scores of 620 or better based on loan amount of $417,000.   For VA loan amounts over $417,000, please contact me.

30 Year Fixed @ 1 Pt:  6.375% (APR 6.700%)

Prime Rate (what HELOCs are based on):  5.000%

Please do not select your Mortgage Professional by interest rates alone and do not shop rates by APR.  These programs all have the same closing costs so you can see APR is not a valuable tool.   

This is just a small sample available of rates and products.  Rates are as of Friday, June 20, 2008 at 8:00 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. 

Mortgage rates continue to be very volatile.  Major lenders are averaging 2 rate changes per day.  Stay tuned with what's going on in the market by subscribing to Mortgage Porter (upper left corner) and Mortgage Porter Twitter for live rate updates (click Follow).