Washington Mortgage Planner-straight up mortgage advice and commentary

Hello everyone! I hope you day is fruitful. I was just thinking (always a scary thought!) about the fact that it's taking us loan officers of the world longer to get loans done. It's due to a combination of factors. Yes, refinance volume is high and I expect it to stay that way for the first half of the year as rates seesaw up and down. Also, there are less of all of us to handle the increased volume. There are fewer appraisers, underwriters, title people, etc. etc. The backlog at my office means most of the time we're locking loans for 40 days. Of course this doesn't even take into account the purchase side of the equation. This seems to be improving as well. Last year I could count on one hand how many purchase transactions I did. This year I think it might average 1/month. In other  words, a big improvement.

So whatever side of the fence you're on, have patience. These are extraordinary times and we need to recognize that loans take longer to do for a variety of reasons. If you're a borrower, please understand and be sure to get your loan officer all the necessary documentation requested in a timely manner. If you're a real estate professional, please communicate everything and exercise patience with all the providers. I don't think we have much longer to go before turn times, etc improve. It's just now that we need to get through. Have a great day!

Good morning: I read a very interesting article this morning that talked about how the difference between the 10 year treasury note yield and mortgage rates is currently at 2.5%. In a normal market, the difference would be 1.75%. With mortgage rates currently right around 5%, is it possible they may dip as much as .75% lower if lending conditions improve? I think so.

Right now the big lending institutions are trying to see if there is a normal market for paper money as opposed to the government having to guarantee everything. For all practical purposes the free market seized up in August 2007 (for more information there is an excellent Bloomberg article on this). Now, on a limited basis, the large financial institutions (think G.E. Capital, for example) are auctioning off commercial paper to see if there's a market.

I was on the phone with a long time business contact of mine the other day and he said he thought we might see mortgage interest rates close to 4%. He's been in business a long time and has often been right. Again, it appears the government along with financial institutions are doing everything possible to jump start our real estate market and the economy.

If there is a swing toward lower rates, I expect it in 60 days or so. I don't know about you but I still have quite a few fence-sitters looking to refinance if rates touch 4.5% or better. Of course we're all hopeful we'll come out of the downturn we're in. This just might be the catalyst we've been looking for. Of course we're also all eternal optimists! Have a great day.

Hello all: Part of my continuing education the end of last year was to take a class on loan modifications. This is becoming a big business these days. The one thing I always felt was that the consumer needed to be careful about who they signed up with to do a loan modification. In fact, most of the time this can be done directly through the lender. I know this may offend some of you who offer this as a service. I'm sorry and hope that you're working on behalf of your client and not lining your own back pocket!

So here are a few simple tips about loan modifications. Although I have heard of loan modifications being done where the interest rate drops yet the borrower has always made their payments on time, this is the exception to the rule. Generally, loan modifications are being done for people who are behind on their payments. In fact, most lenders will state that they will talk to you when you are delinquent. Now I'm not suggesting that you ruin your credit to do this. Any decision should be made after weighing all sides of the equation.

Here in Washington State, they have mandated that your payment should be no more than 38% of your gross income. This means if you have a loan at a much higher interest rate, you may be able to get it cut almost in half. The terms are usually an adjustable rate (let me know if you hear about modifications for a fixed rate) that goes up every year with a lifetime cap. Suffice it to say it's allowing alot of homeowners in trouble to hang onto their houses.

Yes, the process can take up to 60 days but also can stave off foreclosure and allow you to keep your home. All in all, I think it's a good plan. Remember the lender really doesn't want to have to take your house. They have thousands already! Again, you can often contact the lender directly about your situation; you may be pleasantly surprised what they work out for you. I hope this helps. As always, you're welcome to weigh in with your thoughts. Have a great day!

Hello all: I started to write this blog this morning and our power went out! Perhaps it was better to submit it now. I'm two weeks into the New Year with a brand new company and it's working out perfectly. It was a huge decision to switch (I'm not sure anyone does well with change) and I was worried about how I would let all my clients and contacts know about the move. Frankly, I still am but have stayed busy with a postcard, an e-newsletter, an email, and another email set to go out shortly. My whole mission is to let people know where I can be reached.

If you're a subscriber or reader of my blog, please take note. I have moved to the Legacy Group in Bellevue, WA. I feel very lucky to be there. The Legacy Group is one of the premier lenders in the Seattle area and handles residential, private capital and escrow transactions in-house. Coming from the broker side (and increasingly finding it difficult to get loans done), it's nice to have the option of doing both (banking and brokering). It appears the brokerage side is challenged right now and I worked for a great group before that had all the wholesale channels available.

My move to The Legacy Group has also forced me to prioritize and remind myself of what is important to sustain my business. This next week I plan on continuing to call all the people in my database and let them know that I've moved. It's funny how a change can be a motivator in and of itself. It's scary for sure but I have several loans in the works and feel it was the right call. I wish all of you well this year and encourage you to imagine yourself having a great year. I got a very encouraging email from a realtor I know and like. She said that she already sold one listing this year and she was in the process of picking up another. Again, I wish all of you the best. Stay in touch!

Good morning: I find myself in my bathrobe this morning thinking about the fact that I'm starting with my brand new company this Monday. And I have to admit I'm pretty excited!

If a person is going to make a change, I think it's a great idea to do it at the first of the year. It's a new beginning. Granted, it's a little scary to do it. In my case, I had to copy alot of the data I had and transport it over to my new workplace. My new employer has been incredibly helpful and this has made me feel like I made a great decision.

I'll keep you posted as to how it goes. There's a lot of hard work ahead and I'm hopeful the market improves as I feel like most of us are in survival mode right now. Let me know your plans for this new year. And don't be afraid to make a change if things aren't working to your satisfaction. I wish all of you the very best in 2009. You can do it! Take care.

Good morning! And Happy New Year! I would be the first person to admit that 2008 was wacky. A person always starts out optimistic and, although I stayed positive the whole year, I felt like I was in survival mode at the end. I believe this year will be better for all of us in real estate.

I have agreed to switch companies (this will be written about in another post) and will hit a milestone this year by turning 50! I wish all of similar success no matter what you're doing or comes your way. I'd like to hear from you about your plans for this year. Active Rain has become probably the top forum for me. I have learned so much and thank all of you.

So make it a great day today. Whether it's watching the parades or the bowl games, enjoy this time off. And, remember, to take it one day at a time. It's so much easier that way! Take care.