The Death of Mortgage Blogs

iStock_000017972256XSmallThere is a buzz going on among fellow mortgage bloggers about how days may be numbered for mortgage blogs. This is as a largely the result of guidance issued by federal regulators late last year specifically on social media. When I first read this guidance, my initial response was “so what? This is pretty much what lenders are supposed to be doing anyhow”… stuff like properly quoting rates, not being misleading to consumers, etc.  It’s also my opinion that this seems to be written in favor of mortgage banks and not mortgage companies. The big banks seem to not want loan originators who have or express their own opinions.

After more thought and discussion with other mortgage bloggers, I can see the real issue is the compliance factor. Many mortgage companies are already stretched with the cost of compliance with just the day to day operations of originating mortgage loans. It’s my understanding that some lenders have made the decision to just not allow their loan officers to have any independent sights or social media sights (like Facebook or Twitter) as this is the easiest route…no extra compliance cost (additional personal hours) and less risk.

Blogs typically have information released freely and quickly. There are times that I have done “live post” when I’m covering an event, such as the Fed testifying before Congress or to illustrate how something like that may impact mortgage rates. I’m not sure it’s feasible for a compliance officer to be able to regulate and approve everything that a loan officer says or does with social media – imagine a person having to approve any comment or update you put on Facebook or Twitter… it’s simply not realistic and it’s no longer “you” being social or in the moment – it’s you-approved by your employer.

The thought of me no longer being able to blog or to no longer have my  blog, The Mortgage Porter, which I began back in 2006 is absolutely depressing. I really enjoy writing and sharing information with my readers about mortgages, including the process of financing a home and various mortgage programs. At times, it’s even been therapeutic by allowing me to vent or “rant”.  Blogging and social media has brought me so many wonderful opportunities and experiences that I would not have had as a non-blogging mortgage originator.

When I began my blog, it was because of a lack of information, or actually because the wrong information was being shared by the media about loan officer licensing. I never dreamed anyone would read it or that people would actually decide they want me to be their loan officer because of the information I freely shared with them – information that they could not find anywhere else!  I use my blog to share information with potential clients – like “what is a letter of explanation” and sometimes, I’ll write a post just to address an answer to a clients question… if they’re asking it, odds are somebody else is searching for that answer too.

I fully agree that content on mortgage blogs must be compliant – however doing away with mortgage blogs is a travesty.

Less information and less transparency is never good for the consumer.

Good thing I have a back up career! 

Stay tuned.

Lower Conforming Loan Limits

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Back on December 12th, Rhonda posted that FHA etc Loan Limits would be coming down to the same level as previously lowered conventional rates. This came up in a recent discussion I was having with a client and thought the news, which I believe became effective 1/1/2014, should be highlighted a little better, as this is very important news for some people.

Not surprising to us inside the industry. But definitely important to anyone thinking about buying with minimum down and even for those who were not aware of the previously lowered limit for conventional financing.

Disclosure: I am not a lender. Just bringing this news to the forefront now that these limits have become effective so that more people heading out to buy a house in 2014 are aware of the changes.

I also think it is interesting to compare our loan limits to the much lower limits around the State of Washington.

2014 Conforming and FHA Loan Limits for Greater Seattle

Conforming and FHA loan limits for 2014 have recently been released. Conforming loan limits will remain the same as 2013. However, FHA loan limits are being lowered in 2014 from $567,500 to $506,000 for a single family dwelling.  The 2014 FHA loan limits are effective with case numbers obtained January 1, 2014 through December 31, 2014. So you can start your purchase or refi transaction during the last few weeks of this year and still have the higher 2013 FHA loan amount as long as the case number is obtained prior to January 1, 2014.  FHA loan limits do not apply to FHA streamlined refi’s.

The following loan limits for 2014 are for King County, Snohomish County and Pierce County:

Conforming and FHA 2014 Loan Limits:

1 Unit: $506,000
2 Unit: $647,750
3 Unit: $783,000
4 Unit: $973,100




Home Buyer Education Seminars

I am teaching two Home Buyer Education Classes this month sponsored by the Washington State Housing Finance Commission.  Anyone who is interested in buying a home can attend – our class is not limited to first time home buyers.

Home buyers who are interested in programs offered through the Washington State Housing Finance Commission, such as the Home Advantage Program with down payment assistance, are required to take a WSHFC sponsored class.

If you’re interested in attending a class where I will be teaching, you have two opportunities this month:

  • Saturday, July 13, 2013 from 11:00 am to 4:00 pm in West Seattle at the High Point Library. My co-instructor is Ira Sarachoff.
  • Saturday, July 20, 2013 from 11:00 am to 4:00 pm at the Greenlake Library in Seattle. My co-instructor is Jim Reppond.

Lunch is being provided at both of these classes… however, if you have dietary restrictions (or you’re a picky eater 🙂  you may want to bring your own sack lunch.

Both classes are FREE. If you’d like to attend, you can rsvp here.

I’ve always felt that an important part of a mortgage originators job is to educate their clients and make sure their questions are answered before they get to the signing table. I’m very excited to be a part of the Washington State Housing Finance Commission’s program.

2013 Mortgage Loan Limits for King County

rate changesThe 2013 mortgage loan limits for the  greater Seattle area are for the most part, the same as 2012.  The following loan limits apply for homes located in King, Snohomish or Pierce Counties.


1 Unit: $506,000

2 Unit: $647,750

3 Unit: $783,000

4 Unit: $973,100


1 Unit: $567,500

2 Unit: $726,500

3 Unit: $878,150

4 Unit: $1,091,351



NOTE: Technically speaking, VA loans do not have a “limit”. $500,000 is the highest loan amount for a “zero down” VA loan. If a qualified Veteran wishes to buy a home priced above $500,000, the down payment will be 25% of the difference between the sales price/appraised value (lowest of the two) and $500,000.  For example, a $600,000 sales price would have a down payment of $25,000 ($600,000 less $500,000 = $100,000 x 25% = $25,000).

You can find a complete list of loan limits by county for homes located in Washington state in the “footer” of my blog.

Lenders Jacking the Cost to Extend Locks

A lock extension is what is required when a loan does not close in the time frame as arranged with the original lock. Locks are available for 30, 45 or 60 days with the longer the period of time available for the lock, the higher the cost. So if you have a 30 day lock and for what ever reason, your transaction has not closed by day 30, you’re in a situation where the lock may need to be extended.  It used to not be a huge expense if you were 1 day late past the extension, most lenders charged around 0.125% for an additional 7 days (extensions are typically offered in blocks of time, like locks).

Our government elected to pay for the Temporary Payroll Tax Cut by demanding a 0.10% fee on all new mortgages generated by Fannie or Freddie (conventional) and FHA. This roughly pencils out to an increase in rates of about 0.125% give or take.  What some banks have also done, is to increase the cost to extend loans. Some banks/lenders are calling this “temporary” and others are not.

Here’s a sample from one lender who recently increased their extension fees for a second time!


For example, if you have a $300,000 loan amount, prior to the government’s “G-Fee” your extension fee would have been 0.125% of $300,000 = $375.  After February 2, 12, with this lender your cost to extend a rate for 7 days is now a whopping $1,875.

Every lender has their own extension fees. I recommend asking your originator what the cost may be should you need to extend.

Other possible options to consider, depending on where rates are should your lock be expiring, is letting a rate expire and re-locking, if your lender permits. Lenders have different policies with that as well and it’s important that you discuss this with your mortgage originator.

2012 Conforming and FHA Loan Limits for King County

The 2012 Conforming and FHA loan limits for King, Pierce and Snohomish Counties have been announced… ready for a little twist?  Conforming loan limits will remain the same as they currently are and FHA loan limits will be restored to the higher “temporary” loan limits that were available prior to October 1, 2011.

For a single unit residential property in King, Snohomish and Pierce County, the 2012 loan limits are:

  • $506,000 Conforming
  • $567,500 FHA – NOTE: FHA loan limits are effective as of November 18, 2011.

Yep… for the first time (I’m guessing ever) FHA loan limits are higher than conforming!  I’m reading in the blogo-sphere that the higher FHA loan limits are available – HOWEVER, I am not seeing this from HUD (on their loan limit site or a Mortgagee Letter) or from any of the lenders I work with.  Until I see something from HUD or a wholesale lender saying they’re accepting the higher FHA loan limits, then my assumption is that $506,000 is the loan limit through the end of this year.  If I learn otherwise, I’ll let you know!

UPDATE December 5, 2011:  HUD published a mortgage letter Friday and updated their website this morning (or in the wee hours last night) with the higher loan limits.

Washington Association of Mortgage Professionals Celebrates 25 Years

WAMPNext Thursday evening, the Washington Association of Mortgage Professionals has organized a “gala event” to celebrate it’s 25th anniversary and recognize “the best of the best” in the real estate industry from mortgage originators and companies to title, escrow and real estate agents.

michael-colagrossiI thought I would take a few moments to interview Michael Colagrossi, CEO of First Rate Financial (NMLS #60862 MLO#60242) who has been a member of WAMP for the last seven years and is currently serves as the Vice President and in charge of the Mortgage Broker Council, among other duties.

I have had the opportunity to get to know Michael via WAMP and various social media avenues.  My questions to Michael are in bold with his answers following in italic.

Michael, how has WAMP benefited you and your company? WAMP has allowed our company to become more involved with the ongoing changes in the mortgage industry and how to be proactive verses taking a reactive stance.  I also think as a professional it is important to take time to contribute to ones professional association for building and being involved  in a community of professionals allows one to share best practices, knowledge and experiences which benefit everyone.

In your opinion, what are the most 3-5 important contributions WAMP has made to the industry? First and foremost, I believe being in an association that has stood the test of time for 25 years being here are a resource to our industry as well as local and national outlets is a contribution in itself.   We interact with local government whether it be meeting with Maria Cantwell’s office to become their source of information for mortgage related questions, or meeting monthly with DFI in Olympia to give feedback on legislation and how we believe it impacts the citizens of Washington and those in our industry.

Secondly our ability to promote our professional among the public is important and what our members have to go through on a yearly basis to maintain their professional status. This can be seen by visiting our newly launched website at

Third, we are an outlet for not only Mortgage Loan Originators but also all industry professionals ranging from appraisers, insurance agents, title and escrow professionals to voice their opinion in a social setting at our events.  I think sometimes just getting together helps make us realize everyone has a support system and there are others out there fighting the good fight.

WAMP has made it 25 years – what does the future bring for WAMP? Our organization has gone through ups and downs and we recently reorganized WAMP to better reflect the economy. Flexibility and more important, the people we have that volunteer on our board is what helps keep us going. For this is a volunteer organization and without everyone contributing, we would not be here today. We are currently growing and look forward to continuing our progress into the decades to come!

Can you tell us a little about the event next Thursday that is celebrating WAMP’s 25th anniversary? The event is meant not only to celebrate our organization turning 25, but more importantly to recognize the professionals in our industry who go above and beyond for their clients and fellow business partners. The awards re meant to let the community know more about these individuals and teams and acknowledge their contributions over the last year. This event is also a time for everyone to take a load off and celebrate a great year for with all the ups and downs, sometimes we forget to take a step back and smile and realize that life is not all bad and there is light at the end of the rainbow.

Thanks, Mike! 🙂

If you would like to attend this “black tie optional” event, RSVPs technically close tomorrow with limited rsvps next week.   Martin Kooistra, CEO of Habitat of Humanity’s Seattle/South King County is the Key Note Speaker with the awards dinner following.

I hope to see you at the Renaissance Hotel in Seattle on Thursday, October 27th.  RSVP here.

Yield Spread – A Novel

yield spreadYield Spread is a novel written by Roger Rheinheimer, who in addition to being a full time lender in Port Angeles is the highly acclaimed author of Amish Snow, now in its Second Edition.

His new book, Yield Spread,  is about “a man you’ll love to hate, JP Mallot, and the forces that enabled and even condoned his behavior and its bitter consequences.

Mortgage Rates – A “volatile” market this month

Interest rates have been very volatile in June. This Poll Post on Seattle Bubble and the chart below are a good reminder that interest rates were at 5.5% in the Summer of 2009 and at or above 6% quite a few times in 2007 and 2008.

I thought you might find this chart of where interest rates have been for the last 40 years of interest. I borrowed it, with permission, from my friend Jay Thompson’s blog.

Personally I think they will run between 4.5% and 5.5%, but that’s a pretty big spread for people looking at homes to buy. A 1 point spread on a $417,000 conforming loan is $255 a month.


Of more concern to me is the variance in Real Estate Taxes from one property to the next.

When you get pre-approved, make sure you know what payment vs Purchase Price you are being approved for, and what assumptions are being made as to Taxes and Insurance.

I looked at the 30 homes sold in King County for $500,000 in the last 6 months, and the range of Annual Real Estate Tax went from $3,600 on the low side, to $8,000 on the high side. HUGE SPREAD. The Real Estate Taxes could easily turn your pre-approval into a Failed Pending Sale.

Be sure to know the underlying basis of your pre-approval, and make adjustments as needed from one house to the next. If it’s a super-deal, the taxes may be out of proportion to the sold price.