• minimum credit score of 620 for Fannie Mae, FHA, USDA and VA loans. (except for DU Refi Plus)
• maximum debt to income ratios of 45% (some wiggle room for strong borrowers)

Next Friday, I will not be posting rates since our office will be closed November 26 and 27 for the Thanksgiving holiday.   King County will be close on Wednesday, November 25, 2009 (furlough) and reopen for business on Monday, November 30, 2009–so recorded real estate transactions will be taking a few days off as well.    Snohomish County will be closing early on Wednesday and reopen for business on Monday.  I will be posting rates Monday, November 30 at Mortgage Porter and on Friday, December 4, 2009 back here at Rain City Guide.

Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties). The conforming rate quote below is based on owner occupied with a mid-low credit score of 740 or higher, “full doc” purchase with a sales price of $500,000 and a loan amount of $400,000 single family dwelling (non condo). This scenario includes reserves (taxes & insurance) not being waived. Rates quoted are priced based on a 30-40 day closing with no prepayment penalties on any of the rates quoted below.

30 Year Fixed @ 1 Point: 4.500% (APR* 4.651%).    0.125% in rate as quoted on last Friday’s rate post.

15 Year Fixed @ 1 Pt: 4.125% (APR 4.384%).   Same rate as posted last Friday.

10/1 ARM** 5/2/5 CAPS w/1 Pt: 4.000% (APR 5.504%).    Same.

7/1 ARM 5/2/5 CAPS w/1 Pt:  3.625% (APR 5.899%).   Same.

5/1 ARM 5/2/5 CAPS with 1 Point: 3.250% (APR 6.159%).   0.125 in rate.

Conforming High Balance Rates. Pricing is based on the same criteria above except where the loan amount is $417,001 – $567,500 for properties in King, Snohomish or Pierce Counties; specifically priced for a sales price of $625,000 and a $500,000 loan amount.  

30 Year Fixed @ 1 Pt: 4.750% (APR 4.894%).    Same.

Jumbo/Non-Conforming. Loan amounts up to 1 million for ARMs and 1.5 million for the 30 year fixed. The quotes below are based on 740 or higher credit scores with 80% loan to value with a loan amount of $700,000.

30 Year Fixed at 1 point: 5.625% (APR 5.768%).   Same.

7/1 ARM 5/2/5 CAPS @ 1 Pt: 5.000% (APR 6.483%).  Same.

5/1 ARM 5/2/5 CAPS @ 1 Pt: 4.500% (APR 6.605%).   0.125% in rate

FHA. Pricing based on credit score of 620 or better and loan amounts up to $417,000 for FHA in King, Snohomish and Pierce Counties.   The scenario below is based on a sales price of $400,000 with 3.5% down payment.

30 Year Fixed @ 1 Pt: 4.750% (APR 5.382%).   0.125% in rate.

FHA-Jumbo/High Balance. Pricing based on loan amounts from $417,001 – $567,500 for King, Snohomish and Pierce Counties with a 660 or higher mid-credit score.   This scenario is based on a sales price of $585,000 with 5% down payment.

30 Year Fixed @ 1 Pt: 4.875% (APR 5.461%).   Same.

FHA 203(k) Streamline:   NOTE:  FHA 203k’s are taking the lender forever to disburse funds after closing with the lender we work with.  This product is not for the faint of heart.    Please call for a rate quote.

VA. Pricing based on credit scores of 620 or better based on loan amounts up to $417,000. VA loan amounts over $417,000 are also available.  Based on a sales price of $400,000 with 0 down payment.

30 Year Fixed @ 1 Pt: 4.750% (APR 5.030%).   Same.

USDA Rural Housing. 100% financing with income limits and properties must be located within a specific area (this program is generally available in rural towns with populations of 10,000 or less). For eligibility, click here.   60 day lock is quoted as USDA is a longer transaction to close.   This scenario is based on $400,000 with 0 down payment.

30 Year Fixed @ 1 Pt: 5.000% (APR 5.312%).  Same.

Prime Rate (what HELOCs are based on): 3.25%

This is just a small sample available of rates and products. This is not a guarantee nor is it a commitment of interest rate. Rates are as of November 20, 2009 at 8:00 a.m. and may change at any time. Available programs may change at anytime as well. To see rates that I’m quoting “live” click here.

For purposes of this post: “1 point” is 1% of the loan amount and would be reflected in line 801 or 808 (depending on whether the loan is brokered or not). Unless the rate is bought down; there are zero discount points referenced which would be reflected on line 802 of the GFE/HUD-1 Settlement Statement. Zero points means no points are paid on lines 801, 802 or 808 (this applies to all rates quoted on this post).

*APR = Annual Percentage Rate

**ARM = Adjustable Rate Mortgage.   With adjustable rate mortgages, your rate may increase after the initial fixed period is over.

NOTE: Rhonda Porter and Mortgage Master Service Corporation are not affiliated with any real estate brokerages.

According to the article, this decision passed by unanimous vote last night at 11 p.m.

If we’re going to use our limited resources efficiently, this is a big opportunity to reduce transportation costs, balance out enrollment so that hopefully the vast majority of our schools have enough students in them to be successful,” said board president Michael DeBell.

When people are looking for homes to buy, having a geographically based school system is very important. Not knowing which school your child is likely to attend adds a layer of uncertainty to an already uncertain process. I’m sure this decision will be controversial, but I have to agree that when an entire community is vested in the success of the “neighborhood” school…the system will improve via more outside support. Also, it will be easier to target the schools and communities that need more support than the local community can itself provide.

I went to the school around the corner from my house. I could even see inside the school from my yard. My children always attended the school nearest my home, and I used “which school?” as the basis for my home buying decision. Parents and children from the neighborhood around the school volunteered to help with seasonal maintenance projects and had a vested interest in the school being a safe and attractive neighborhood component.

On all counts, I think this is a good decision. Still I expect it will have as many unhappy constituents as it has happy supporters, until the system is in place long enough for people to forget the three decade old “used to be”.

It has always been an awkward situation.   Realtors and Loan officers are customers, not clients.  There is a difference, not in importance each plays in a transaction (very important), but in how the relationship is treated by each party to the other.

You have essentially two camps:

1)       Agents and loan officers who believe that they control your business by intimidation or by the threat of moving their business to a competitor or both.  They sometimes feel like title and escrow companies “owe” them something in addition to providing good service and a successful resolution to a closed transaction.  When things go awry, it is easy to spot those in this camp: they are “reactionary” when not fully understanding what goes on behind the scenes.   What they are really conveying is that “they don’t understand,” or are so loudly barking that it gets in the way of understanding how certain situations could be avoided or how to effectively treat end-client (buyers and sellers) management of expectations.

2)      Agents and loan officers who believe they work in collaborative environment and know that each servicer or party to the transaction (including other agents) provides an important product or service to help effect a successful closing.  In addition, agents and loan officers who understand their relationship with their service providers also learn to respect each others skill sets and experience in a teamwork environment.    People who work under this environment are slow to be “reactionary,” and quick to find resolution by seeking to first understand, typically by just asking.   Professionals in this category are those that title and escrow people want to work very hard to keep and will usually go way out of their way to help.

Collaborators would say, “Captain Sully, thanks for saving my life.   Landing in the Hudson River is not fun, but I’m grateful I can live to talk about it.”  They get the big picture.  The other camp would say, “I can’t believe I missed my connecting flight.”

Most title and escrow people I know enjoy working with customers and clients that fall into the 2^nd camp.    They enjoy working with people who understand a collaborative relationship that is build on a foundation of trust, experience, responsibility and dependability.    Title and escrow staff work in an environment that is rich with legal issues (very top heavy in this regard), different sets of regulations than that of agents and loan officers and the requirement of managing a laundry list of tasks unique to closing transactions—much of which is done under extreme pressure of time and reliance upon others to do their collaborative job and provide accurate and timely information to the very people (title and escrow) who they rely upon to close transactions.

While related, the industries within real estate are very different businesses (some very specialized) and I think this is sometimes not quite firing within the grey matter “synapses” inside skulls.  If this is understood it may curb common knee-jerk commentary around the office water cooler:  “they don’t know what they are doing,  they screwed up my deal, etc…”   It would be very irresponsible for me to comment, “this loan officer doesn’t know how to lock their loan,” when I’ve never originated a loan in my life.  Likewise, it is irresponsible for another party to comment that “xyz title company screwed up my deal or doesn’t have a clue…..”

If there is an area sorely in need of improvement  in regard to the title and escrow industry, it is the realization that  we need to reach out more and provide relevant workshops  and real solution oriented tools and suggestions to our core customers (agents and loan officers) on what goes on behind the scenes and during transactions so that clear and open dialogue of transaction expectations and management is achievable.    THIS is what creates smooth transactions.  The end is near on calling on offices armed with calendars, pens, and other non-value driven dribble such as hollow speak and  “experience the difference” nonsense  marketing.

And with that, we’re out the door to sign clients this Saturday afternoon.  Yes, I’d rather be here.

By the way, you’ve heard of them but never seen them:  title runners.

Title Runners (Sno. Co.)

These are the people who take security instruments (Deed of Trusts, Excise Documents, etc.) from title companies to be recorded.  They relay the recording numbers back to the title company or directly to agents and escrow offices.

(Each individual gave me permission to take their photo)

In most instances, a buyer will take title to the property by a statutory warranty deed. As the name implies, this deed is defined by statute. That said, this statute merely codified the common law, which evolved over several hundred years (beginning in medieval England).

In any event, a statutory warranty deed includes several warranties, or promises, from the seller:

(1) That at the time of the making and delivery of such deed he was lawfully seized of an indefeasible estate in fee simple, in and to the premises therein described, and had good right and full power to convey the same; (2) that the same were then free from all encumbrances; and (3) that he warrants to the grantee, his heirs and assigns, the quiet and peaceable possession of such premises, and will defend the title thereto against all persons who may lawfully claim the same.

Given that this is pretty dense “legalese,” I’ll summarize: When a seller conveys title by statutory warranty deed, the seller warrants to (or promises) the buyer: (1) that the seller was the sole true and legal owner of the property; (2) that the seller had the legal authority to pass title to the buyer; (3) that the property is free from all encumbrances; (4) that the buyer’s ownership of the property will not be challenged; and (5) that the seller will defend the buyer’s claim of ownership if challenged. If one of these warranties is breached, then the seller will be liable to the buyer under the terms of the deed.

Of particular importance, a seller makes these warranties and will be liable for their breach even if the buyer knows of the breach at the time of conveyance. If the seller wants to limit these warranties and to exclude certain known breaches (for example, a known encumbrance), then the seller must do so in the deed itself. This is accomplished by a “subject to” clause in the deed.

If the deed does not identify an existing encumbrance in a “subject to” clause, then the seller faces liability immediately upon closing. For example, assume the seller and buyer are both aware of the fact that the neighbor’s fence encroaches five feet onto the property. Moreover, everyone knows that the fence has been there for 20 years. Thus, everyone knows that the neighbor has a very good adverse possession claim (i.e., the neighbor has a good claim that he has taken ownership of the portion of the property on his side of the fence). Regardless, unless the deed specifically excludes this claim from the warranties within the deed, the seller will still be liable to the buyer for this claim. The seller would have to pay for any defense of the buyer’s title (i.e., attorney’s fees and costs of litigation), and if the neighbor had taken title to the area then the seller would have to compensate the buyer for the resulting loss in value.

Thus, it is important that the deed by which the seller conveys title correctly excludes from the inherent warranties those defects on title that are known and exist at the time of closing. Of course, a buyer may object to a “subject to” clause that includes the known defect (such as the fence and adverse claim in the hypothetical above) because the purchase and sale agreement requires the seller to resolve such encumbrances. But if the seller simply folds on the issue and warrants against the encumbrance, the seller is not doing himself any favors. Rather, certain liability will result.

Although the jumbo rate below shows a half point improvement–it’s not due to change in pricing in the markets, it’s because of a lender coming back to the non-conforming market.  Bottom line, it’s a relief for those who have higher priced homes to sell and large mortgages to refinance.   Competition is GOOD for mortgage rates (this is an example of why you really don’t want only a few banks to select your mortgage from and you NEED mortgage brokers and correspondent lenders).

Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties). The conforming rate quote below is based on owner occupied with a mid-low credit score of 740 or higher, “full doc” purchase with a sales price of $500,000 and a loan amount of $400,000 single family dwelling (non condo). This scenario includes reserves (taxes & insurance) not being waived. Rates quoted are priced based on a 30-40 day closing with no prepayment penalties on any of the rates quoted below.

30 Year Fixed @ 1 Point: 4.625% (APR* 4.777%).    0.125% in rate as quoted on last Friday’s rate post.

15 Year Fixed @ 1 Pt: 4.125% (APR 4.384%).    0.125% in rate

10/1 ARM** 5/2/5 CAPS w/1 Pt: 4.000% (APR 5.504%).    0.125% in rate

7/1 ARM 5/2/5 CAPS w/1 Pt:  3.750% (APR 5.899%).   Same.

5/1 ARM 5/2/5 CAPS with 1 Point: 3.375% (APR 6.205%).   Same.

Conforming High Balance Rates. Pricing is based on the same criteria above except where the loan amount is $417,001 – $567,500 for properties in King, Snohomish or Pierce Counties; specifically priced for a sales price of $625,000 and a $500,000 loan amount.  

30 Year Fixed @ 1 Pt: 4.750% (APR 4.894%).     0.125% in rate

Jumbo/Non-Conforming. Loan amounts up to 1 million for ARMs and 1.5 million for the 30 year fixed. The quotes below are based on 740 or higher credit scores with 80% loan to value with a loan amount of $700,000.

30 Year Fixed at 1 point: 5.625% (APR 5.768%).   0.500% in rate

7/1 ARM 5/2/5 CAPS @ 1 Pt: 5.000% (APR 6.483%).  0.250% in rate

5/1 ARM 5/2/5 CAPS @ 1 Pt: 4.625% (APR 6.654%).  Same.

FHA. Pricing based on credit score of 620 or better and loan amounts up to $417,000 for FHA in King, Snohomish and Pierce Counties.   The scenario below is based on a sales price of $400,000 with 3.5% down payment.

30 Year Fixed @ 1 Pt: 4.875% (APR 5.515%).  Same.

FHA-Jumbo/High Balance. Pricing based on loan amounts from $417,001 – $567,500 for King, Snohomish and Pierce Counties with a 660 or higher mid-credit score.   This scenario is based on a sales price of $585,000 with 5% down payment.

30 Year Fixed @ 1 Pt: 4.875% (APR 5.461%).    0.125% in rate

FHA 203(k) Streamline:   NOTE:  FHA 203k’s are taking the lender forever to disburse funds after closing with the lender we work with.  This product is not for the faint of heart.    Please call for a rate quote.

VA. Pricing based on credit scores of 620 or better based on loan amounts up to $417,000. VA loan amounts over $417,000 are also available.  Based on a sales price of $400,000 with 0 down payment.

30 Year Fixed @ 1 Pt: 4.875% (APR 5.185%).   Same.

USDA Rural Housing. 100% financing with income limits and properties must be located within a specific area (this program is generally available in rural towns with populations of 10,000 or less). For eligibility, click here.   60 day lock is quoted as USDA is a longer transaction to close.   This scenario is based on $400,000 with 0 down payment.

30 Year Fixed @ 1 Pt: 5.000% (APR 5.312%).  Same.

Prime Rate (what HELOCs are based on): 3.25%

This is just a small sample available of rates and products. This is not a guarantee nor is it a commitment of interest rate. Rates are as of November 13, 2009 at 10:00 a.m. and may change at any time. Available programs may change at anytime as well. To see rates that I’m quoting “live” click here.

For purposes of this post: “1 point” is 1% of the loan amount and would be reflected in line 801 or 808 (depending on whether the loan is brokered or not). Unless the rate is bought down; there are zero discount points referenced which would be reflected on line 802 of the GFE/HUD-1 Settlement Statement. Zero points means no points are paid on lines 801, 802 or 808 (this applies to all rates quoted on this post).

*APR = Annual Percentage Rate

**ARM = Adjustable Rate Mortgage.   With adjustable rate mortgages, your rate may increase after the initial fixed period is over.

NOTE: Rhonda Porter and Mortgage Master Service Corporation are not affiliated with any real estate brokerages.

March 8, 2009  

I read your post and I’m very excited.  I am a novice when it comes to mortgage so please help me understand this.  I bought my house 4 years ago and the values have dropped.  I have two mortgages 80% and 20% with the same lender.  I am currently paying around 42% of my gross income.  

My understanding is that only the first mortgage will be lowered down?  Both of my mortgages are with the same lender [very large bank].  I will call them on Monday but need to hear from you as I trust your opinion more.  What will happen to my other 20% loan, it’s at 7%.  Please help….

I provide the toll free number and contact information for his bank.  With two mortgages at 100% or higher loan to value, it’s pretty challenging to help anyone.  Second mortgages have become more difficult than ever–even with short sale negotiations.    I suggested that he contact his bank/mortgage servicer since they have both mortgages with hopes they would maybe modify his loan if it did not qualify for the refi.

March 9, 2009

Thank you for your support, it means a lot to me.  I was on hold with the bank for no avail.  I will try again tomorrow.  I guess they’re receiving too many calls these days.

I replied:  I’m sure they’re inundated…they did a lot of second mortgage/home equity loans up to 100% loan-to-value.

March 10, 2009

I was able to get hold of them this morning at 5:00 a.m. (they open at 8 EST).  The good news is that my first mortgage is with Fannie Mae…they would not discuss options with me until I fill out their paperwork.  Thanks for all of your help.

I told him I was glad and asked him to keep me informed of his progress.   He immediately replied:

Sure, I will keep you posted.  I will be submitting my application by this Friday  :)

I didn’t hear from him again until today.

Hi.  I hope everything is going well for you.  I just wanted to update you regarding my application.   Well, the bank denied my application citing that my monthly payments on my first, including insurance, property taxes and HOA is not 37% of my monthly gross income.   When I argued that the program says 31%, their rebuttal is that they us a sliding scale based on income.  I’m not sure if this is what the program guidelines say or is it just something the bank came up with on their own.   I just wanted to thank you for your help through this effort.

There are a lot of stats thrown to the press about how great HARP is and how many people have been helped.   There are many who have not been so lucky and have had to go through hoops to find out.

Has any home owner had success dealing with their second mortgage with a Home Affordable refinance or loan mod program?

Here is a link to the article, courtesy of Realty Times: http://realtytimes.com/rtpages/20091105_restrictive.htm

In essence, the Cato Institute study found that the bubble wasn’t really national, it was mostly confined to about a dozen states, all of whom were practicing some form of what urban planners call ‘growth management’ – basically pushing the bulk of housing growth into limited urban areas (sure sounds familiar). The effect of that practice was to boost the price of land inside the urban area, and make housing more expensive – and incidentally increase the tax revenues and job growth of cities in preference to counties – hmm.  That same restriction also allowed the cities to impose more and more permitting restrictions that caused more expense and longer lead times for developers – and thereby both restricted supply and raised prices to consumers even further.

My favorite example of some of these practices is the number of brand new houses built in Kirkland in the past few years that have a detached garage with a qualified accessory dwelling unit above it.  How many buyers qualified to buy a $1.5 Million house would want a detached garage, let alone a large ADU they have no intention of renting to a stranger on their property?  But it sure helps the city of Kirkland meet their growth management requirement for additional ‘housing’ units.

There’s a lot more more interesting analysis and discussion in the article – well worth reading.

Don’t forget, Wednesday, November 11, 2009 is Veterans Day with many companies closed to honor those who serve our Country.   There will be no recordings taking place on next Wednesday.

Conforming Mortgage Rates (loan amounts up to $417,000 for 1-unit properties). The conforming rate quote below is based on owner occupied with a mid-low credit score of 740 or higher, “full doc” purchase with a sales price of $500,000 and a loan amount of $400,000 single family dwelling (non condo). This scenario includes reserves (taxes & insurance) not being waived. Rates quoted are priced based on a 30-40 day closing with no prepayment penalties on any of the rates quoted below.

30 Year Fixed @ 1 Point: 4.750% (APR* 4.904%).  Same rate as quoted on last Friday’s rate post.

15 Year Fixed @ o.50 Pt: 4.25% (APR 4.435%).   0.50 point in fee.

10/1 ARM** 5/2/5 CAPS w/1 Pt: 4.125% (APR 5.580%).    0.125% in rate

7/1 ARM 5/2/5 CAPS w/1 Pt:  3.750% (APR 5.899%).   0.125% in rate

5/1 ARM 5/2/5 CAPS with 1 Point: 3.375% (APR 6.205%).   Same.

Conforming High Balance Rates. Pricing is based on the same criteria above except where the loan amount is $417,001 – $567,500 for properties in King, Snohomish or Pierce Counties; specifically priced for a sales price of $625,000 and a $500,000 loan amount.  

30 Year Fixed @ 1 Pt: 4.875% (APR 5.021%).   Same rate as quoted on last Friday’s rate post.

Jumbo/Non-Conforming. Loan amounts up to 1 million for ARMs and 1.5 million for the 30 year fixed. The quotes below are based on 740 or higher credit scores with 80% loan to value with a loan amount of $700,000.

30 Year Fixed at 1 point: 6.125% (APR 6.276).  Same as the last rate quote.

7/1 ARM 5/2/5 CAPS @ 1 Pt: 5.250% (APR 6.609%). Same.

5/1 ARM 5/2/5 CAPS @ 1 Pt: 4.625% (APR 6.654%).  Same.

FHA. Pricing based on credit score of 620 or better and loan amounts up to $417,000 for FHA in King, Snohomish and Pierce Counties.   The scenario below is based on a sales price of $400,000 with 3.5% down payment.

30 Year Fixed @ 1 Pt: 4.875% (APR 5.515%)   0.125% in rate

FHA-Jumbo/High Balance. Pricing based on loan amounts from $417,001 – $567,500 for King, Snohomish and Pierce Counties with a 660 or higher mid-credit score.   This scenario is based on a sales price of $585,000 with 5% down payment.

30 Year Fixed @ 1 Pt: 5.000% (APR 5.631%).  Same.

FHA 203 (k) Rehab-Streamline. Pricing criteria same as FHA above with loan amounts up to $417,000. This scenario is based on a $400,000 base loan amount with a 3.5% down payment.   NOTE: my source for 203k loans is taking approx. 60 days to make the first disbursement of funds following closing.

30 Year Fixed @ 1 Pt: 5.250% (APR 5.999%).  Same.

VA. Pricing based on credit scores of 620 or better based on loan amounts up to $417,000. VA loan amounts over $417,000 are also available.  Based on a sales price of $400,000 with 0 down payment.

30 Year Fixed @ 1 Pt: 4.875% (APR 5.185%).   0.125% in rate

USDA Rural Housing. 100% financing with income limits and properties must be located within a specific area (this program is generally available in rural towns with populations of 10,000 or less). For eligibility, click here.   60 day lock is quoted as USDA is a longer transaction to close.   This scenario is based on $400,000 with 0 down payment.

30 Year Fixed @ 1 Pt: 5.000% (APR 5.312%).  Same.

Prime Rate (what HELOCs are based on): 3.25%

This is just a small sample available of rates and products. This is not a guarantee nor is it a commitment of interest rate. Rates are as of November 6, 2009 at 8:30 a.m. and may change at any time. Available programs may change at anytime as well. To see rates that I’m quoting “live” click here.

For purposes of this post: “1 point” is 1% of the loan amount and would be reflected in line 801 or 808 (depending on whether the loan is brokered or not). Unless the rate is bought down; there are zero discount points referenced which would be reflected on line 802 of the GFE/HUD-1 Settlement Statement. Zero points means no points are paid on lines 801, 802 or 808 (this applies to all rates quoted on this post).

*APR = Annual Percentage Rate

**ARM = Adjustable Rate Mortgage.   With adjustable rate mortgages, your rate may increase after the initial fixed period is over.

NOTE: Rhonda Porter and Mortgage Master Service Corporation are not affiliated with any real estate brokerages.