The Mortgage Porter

President Obama's Refi Plan for Non-HARP Qualified Homeowners

On last week's State of the Union Address, President Obama announced a plan to help underwater homeowners who do not qualify for a Home Affordable Refinance.  In order to qualify for a Home Affordable Refi (aka HARP 2.0) the home owner's mortgage needs to have been securitized by Fannie Mae or Freddie Mac prior to June 1, 2009 and meet other qualifications.  If the home owner currently has a jumbo loan, they are instantly disqualified for HARP 2.0. since jumbo mortgages are non-conforming (not Fannie or Freddie programs). HARP is also restricted by existing conforming loan limits and in the greater Seattle area, the current conforming loan limit is $506,000.  Even if you have a conforming loan amount of $567,500 (last year's conforming loan limit in Seattle), current HARP guidelines limit you to a $506,000 loan amount.

President Obama's proposal is to help underwater home owners who have made their mortgage payments on time and who do not qualify for HARP 2.0 is to allow them to have an FHA insured mortgage without an appraisal.  FHA insured mortgages have different loan limits than conforming. In the Seattle area, the FHA loan limit is $567,500. Obama's new refi program, should it come to fruition, will be limited to FHA loan amounts. 

FHA mortgages are a great program, however they're also very expensive when compared to conventional loans.  This is because they have both upfront and monthly mortgage insurance fees, which are constantly being raised by Congress. FHA mortgages have both upfront and monthly mortgage insurance regardless of the loan to value of the property. 

As of 8:30 this morning, an FHA rate on a loan amount of $567,500 in Seattle - Bellevue with a 720 or higher credit score is 3.750% for a 30 year fixed rate (apr 4.767).  Principal and interest with the financed UFMIP is $2,654.46 and the monthly mortgage insurance premium is an additional $515.85 for a total (PIMI) payment of $3,170.31, not included property taxes and insurance.  This PIMI payment equals an interest rate in the low-to-mid 5% range if you compare it to a conventional mortgage.

This program is also costly as Obama plans to pay for it by charging banks additional fees and we all know that this trickles down to the consumer. The Temporary Payroll Tax illustrates how banks have increased mortgage rates AND the cost to extend a rate lock commitment.

It's reported that the new program will not require an appraisal or proof of income and will be available for primary residences only. Employment will need to be verified and mortgage payments must have been made on time for the last 6 months.  Although this is "Obama's Refi Plan", we have to wait and see if Congress approves it and how the big banks and lenders will embrace this program.

If you currently have an FHA insured mortgage, you don't need to wait and see if Obama's refi plan will help you. You may already be able to refinance with an FHA streamlined refi without an appraisal. 

If you would like to stay informed of mortgage programs like this, please subscribe to my blog (upper right corner) or follow me on Twitter and Facebook.  You can unsubscribe anytime!

If you are interested in a mortgage for a home located anywhere in Washington state, I'm happy to help you! I have been originating all types of loans at Mortgage Master Service Corporation since 2000.  Click here for your no-hassle mortgage quote on your Washington property.

Thank YOU, Veterans

As General Colin Powell said in an interview last night, "every day should be Veterans Day".  A heartfelt thank you to those who serve our Country and their families.

Mortgage Master Service Corporation is closed today in observance of Veterans Day.

What's Moving Mortgage Rates, November Holidays and More!

Europe continues to impact our markets as we watch the drama in Greece and Italy continue to unfold. It's amazing to some that something that is happening so far away may impact your mortgage rates. This is because mortgage rates are based on mortgage backed securities (bonds) and investors will either seek the safety of bonds over stocks when stocks are deteriorating or will opt for stocks and sell bonds when a better return is available. Basically, bad economic news tends to be good for mortgage rates (not so good for our retirement accounts) and good news, as well as inflationary data, tends tends to drive mortgage rates higher. 

This afternoon, we'll have the results of a $32B auction of 3-year Treasury Notes.  We don't have any major economic reports scheduled to be released until Thursday, November 10th, with the weekly Initial Jobless Claims. On Friday, we have Consumer Sentiment from the University of Michigan.  On Friday, the bond markets will be closed in observance of Veterans Day.

Something else to keep in mind with November is that it is a shorter month as we are beginning "the holiday season". Some of these holidays may impact your refinance waiting periods or when you may be able to close.

Friday, November 11, 2011 is Veterans Day.  Veteran’s Day is a federal holiday, therefore, this date cannot be included when counting the waiting period for rescissions for refi's, MDIA (initial waiting period and re-disclosure waiting period) or HVCC.  In addition, this date is not counted in the 3 day disclosure requirement for initial disclosures or re-disclosures.  Banks, county courthouses, and Mortgage Master Service Corporation will be closed for business on Friday, 11/11/11.

Thursday, November 24, 2011 (Thanksgiving):  Thanksgiving is a federal holiday, therefore, this date cannot be included when counting the waiting period for rescissions, MDIA (initial waiting period and re-disclosure waiting period) or HVCC.  In addition, this date is not counted in the 3 day disclosure requirement for initial disclosures or re-disclosures.  Banks, the post office, the county courthouses, and Mortgage Master Service Corporation will be closed for business on Thursday, 11/24/11.

Friday, November 25,2011:  This is NOT a federal holiday.  While courthouses and Mortgage Master Service Corporation are closed, this date can be included in the waiting period for rescissions, MDIA (initial waiting period and re-disclosure waiting period) or HVCC.  In addition, this date is counted in the 3 day disclosure requirement for initial disclosures or re-disclosures.

Also in November... 

In a few weeks we should have more details about HARP 2.0 and learn what 2012's loan limits will be for Conforming and FHA loans.  And hopefully this month, there will be decision on the VA funding fee, which was earlier reduced and then retracted. It's quite possible that conforming and FHA loan limits may be reduced further - we really have no idea what Congress is going to agree on at this time.  Currently the conforming and FHA loan limits in King, Pierce and Snohomish County is $506,000 (reduced from $567,500 on October 1, 2011).   If you have a "high balance" loan amount and are considering refinancing or buying, you may be gambling becoming a "jumbo loan" with each day you wait.  

If you have questions or need help with a mortgage on a home located anywhere in Washington, please contact me.  I am a Licensed Mortgage Originator who not only provides information to consumers via my blog, I help people with homes in Seattle, Redmond, Tacoma, Everett and beyond with their refinance and home purchase mortgage needs. I also adopt mortgages. If you haven't heard from your mortgage originator in the last six months, it's quite possible they are either no longer licensed or may have chosen another career. If your home is in Washington, and you would like to be treated like one of my clients (added to may mailing list, receive updates and a review of your current mortgage - no refinance or new mortgage is required) please contact me.

Comcast service issues from Seattle to Renton

UPDATE 11:15 am: our office is being told that they expect service to be up in an hour.

UPDATE 11:00 am: learning that our office in Kent is having internet issues too. This sucks.  No message from Comcast if the ETA  is 1:45 today but that's how it's looking at this point!  West Seattle Funblog reports that 388,000 Comcast users are NOT having a Comcastic experience.

UPDATE 10:00 am: a few of us on Twitter are asking @ComcastBill if the outage is expected to be repaired in 1 hour and 45 minutes or at 1:45 today (no answer yet). My email is working - but slow.

UPDATE 9:30 am:  It looks like Comcast's issues were spotty from the friends I surveyed on Facebook and Twitter.  Regardless it looks like my service is slightly improved "back to normal"....KNOCK ON WOOD!!   With so much of my mortgage business being internet based, having slow internet and email is a real set-back.

My internet and email are being painfully slow this morning.  I tweeted to @Comcastcares and here's their response:

I'm trying to find out just how widespread this outage is.  

Meanwhile I'm trying switching to my Droid to see if that will provide better service than Comcast.  

 

First American Title Company absorbs The Talon Group and Pacific Northwest Title

This afternoon, I learned that the local operations of First American Title Insurance Company are merging their divisions of Pacific Northwest Title and The Talon Group into First American.

From First American Title's email announcement:

First American Title, Pacific Northwest Title and The Talon Group are combining forces effective October 1, 2011.  In Washington and Oregon counties where we currently operate under these multiple brands we will be consolidating into a single operation to serve you and your clients as First American Title Company.

According to Pacific Northwest Title's "Our Story" page, they were established as an independent title and escrow company in 1983 and was purchased by First American Title in 2004.

The Talon Group was actually created by First American Title as a new brand when they purchased Escrow Partners in 2003. This event strikes home for me as my husband has been an employee at The Talon Group in this area since it's inception. And as "a spouse" I've had the fortune to get to know many of excellent folks at Talon over the years.  

As someone who began in the real estate industry back at Safeco Title Insurance in '86 just prior to Chicago Title's acquisition, I understand what many of the employees must be feeling right now.  

For more information, please contact your local First American, Talon Group or PNW title rep.

Happy Memorial Day

Three years after the Civil War, Memorial Day began as Decoration Day to be "a time for the nation to decorate the graves of the war dead with flowers"  The end of May was considered a time where blooms would be readily available.

"Memorial Day Order"

General Orders No. 11, Grand Army of the Republic Headquarters.

I. The 30th day of May, 1868, is designated for the purpose of strewing with flowers, or otherwise decorating the graves of comrades who died in defense of their country during the late rebellion, and whose bodies now lie in almost every city, village and hamlet churchyard in the land. In this observance no form or ceremony is prescribed, but Posts and com­rades will, in their own way arrange such fitting services and testimonials of respect as circumstances may permit.
   We are organized, Comrades, as our regulations tell us, for the purpose among other things, "of preserving and strengthening those kind and fraternal feelings which have bound together the soldiers sailors and marines, who united to suppress the late rebellion."  What can aid more to assure this result than by cherishing tenderly the memory of our heroic dead?  We should guard their graves with sacred vigilance.  All that the consecrated wealth and taste of the nation can add to their adornment and security, is but a fitting tribute to the memory of her slain defenders.  Let pleasant paths invite the coming and going of reverent visitors and fond mourners.  Let no neglect, no ravages of time, testify to the present or to the coming generations that we have forgotten as a people the cost of a free and undivided republic.
   If other eyes grow dull and other hinds slack, and other hearts cold in the solemn trust, ours shall keep it well as long as the light and warmth of life remain in us.
   Let us, then, at the time appointed, gather around their sacred remains, and garland the passionless mounds above them with choicest flowers of springtime; let us raise above them the dear old flag they saved; let us in this solemn presence renew our pledge to aid and assist those whom they have left among us a sacred charge upon the Nation's gratitude—the soldier's and sailor's widow and orphan.

II. It is the purpose of the Commander‑in‑Chief to inaugurate this observ­ance with the hope that it will be kept up from year to year, while a survivor of the war remains to honor the memory of his departed comrades. He earnestly desires the public press to call attention to this Order, and lend its friendly aid in bringing it to the notice of comrades in all parts of the country in time for simultaneous compliance therewith.

III. Department commanders will use every effort to make this Order effective.                                     

By Command of:

John A. Logan

Commander in Chief                                              

May 5, 1868  

 

 

25 Years Ago Today

Hard to believe that 25 years ago, I began my career in real estate at Safeco Title Insurance in Seattle.  It was a fluke that I wound up in the title insurance industry. Unsure of what I wanted to do for my career and needing an income, I went to the local Business Careers in Renton and they found my new job at Safeco Title (which was merged with Chicago Title Insurance Company).  My first day was May 1, 1986. Don't worry, I'm not going to bore you with the 14 year history of my career in title insurance and escrow industry or my eleven years as a mortgage originator at Mortgage Master Service Corporation.   This is just a little sentimental moment reflecting back on all of my years I feel fortunate to have been a part of such a fascinating industry.  

 

I'm looking forward to my next 25 years in mortgage and real estate!   And yes, that really is the former coach of the Seattle Seahawks, Chuck Knox, and those are real Seahawks uniforms.

Happy Earth Day

When I'm not helping people with financing to refinance or buy their next home or investment property, I love to spend time in my garden.

 
Check out this hummingbird who decided to take a break in one of the cherry trees in the front yard of our Seattle home.

How are you celebrating Earth Day?

What If the Government Shuts Down

I'm getting a lot of questions from Seattle area real estate agents, home buyers and home owners about what may happen with regards to mortgages in process.   Here's a few potential issues that I see:

• 4506T (tax transcripts that are ordered from the IRS) may not be issued.  All conventional, FHA, VA and USDA loans require 4506Ts prior to funding. 
• FHA loans may not be able to obtain insurance.  Our company CAN FUND FHA and PROCESS loans.  Obtaining the FHA insurance takes place after funding.
• Transactions where HUD is the seller may be impacted. 

If you have a mortgage transaction in process, you may want to check with your mortgage originator to see if there are any possible implications to your transaction.

Hopefully this is a moot point post and our elected officials in Congress can come to an agreement on our budget.

Here's a 44 page outline of HUD's plans in the event the Government shuts down.  Hat tip to Kary Krismer.

Happy April Fools

It's no joke.  Today marks my eleventh year as a mortgage originator for Mortgage Master Service Corporation.  When I began in 2000, the only mortgages I originated were FHA, VA and conventional.  I was really fortunate because I had developed many strong relationships from being in the title and escrow industry for 14 years and that "JVs" had not yet really popped up.  I was fortunate.

The "jv's" I'm referring to are the joint ventures by several of the big real estate companies to create their own mortgage, escrow and/or title companies.   Broker owners like to do this because they have a captive audience with their real estate agents and the JVs create a great deal of income for them.  Many broker owners do everything in their power to steer business to their in-house joint-ventures. 

When I began in the mortgage industry, a great deal of my business was helping first time home buyers in areas like Federal Way, Des Moines and Renton since most of the agents I worked with as a title rep were in South King County.  Many of my first clients, I still work with today.  I'm so greatful to the agents and home owners who have referred business to me over the years.

I'm also thankful that I began my mortgage career BEFORE subprime mortgages plagued our industry.  Don't get me wrong, I still believe that for the most part, there are no bad mortgages (I never originated an option ARM and the few stated income loans I did, my clients actually made the income); there is bad applications or uses for the mortgage coupled with bad (or no) advice.  Subprime loans were misused by borrowers, loan originators, real estate agents and appraisers who lacked a moral compass or justified bad decisions by "every one else is doing it...it must be right".   Subprime made up a small portion of business for clients who found themselves in a "subprime situation" and/or who did not want to take the time to work on what ever was causing them to be "subprime" for qualifying (lack of credit, income or assets).  I would say many became lazy and impatient.  Fueled with rising home prices, many lost reason.  I do think subprime will come back...disguised under a different name, like "non-prime".  And there are many qualified home owners who could use a little "sub-prime" guidelines to help them keep their homes.

Today, new rules created by the Fed regarding how I may be compensated will go into effect.  This was suppossedly created to help predatory lending by not allowing LOs to increase a rate to make more commission.  I'm totally fine with having my income no longer a part of the conversation.  I am bothered that with how the Fed has structured this rule, mortgage originators can no longer use their commissions to help out with borrowers closing costs after the loan is locked (paying extensions, for example).  Consumers will wind up paying for what the Fed (and Frank Dodd this summer) has done.

 
I do plan on sticking around in the industry for at least another eleven years assuming our industry is not regulated to death.  I love being a mortgage originator and helping people meet their financial goals and desire to be home owners.  Thanks to everyone for your continued support, your referrals and for reading my blog.

PS: One more reason why April Fools is special to me:  Five years ago today, I married my sweet heart.

I hope your April Fools is as happy as mine!