James Wirth

Interest rates today remind me of my 1 1/2 year-old... I turn my back for ONE SECOND and he falls down! Based on a number of factors including unemployment numbers coming in worse than expected, mortgage rates went down today, closing at the recent low:

4.5% Rate / 4.673% APR
P & I payment: $2,112.88
Loan amount: $417,000
Down payment/equity: 20%
Loan Program: 30 Year Fixed

Rates are as of 5/13/09. Subject to change without notice and most likely they will, but I will be ready in the morning in case they open where they closed! Anyone care to lock a rate? Anyone? Bueller? Bueller?

--James Wirth

I have received a lot of feedback on my original posting entitled "The Home Affordability Refinance Program." You can read the original post and comments here. The goal of my original posting was to provide information regarding the newly announced "Making Home Affordable Program." Here' s a quick review:

The program has two components: the modification program -- designed to reduce the monthly payment of struggling homeowners to a more affordable level to keep them in their homes; and The refinance program -- designed to allow homeowners to refinance into a lower rate who are not able to qualify otherwise because of a loss of equity due to lower values.

There is still a lot of confusion about the details of the programs, so I've compiled a list of Frequently Asked Questions based on comments and feedback I've received since my original post. I hope this will offer some clarity and ease the pain of trying to sift through the details.

Q: The makinghomeaffordable.gov Web site says I may be eligible, but my lender says I am not. Who is right and how do I fight this?

A: A caveat to the results of the 'quiz' on the makinghomeaffordable.gov Web site is that you must check with your loan servicer (the company you make your house payments to) to find out if you are eligible. This is a crucial point because of two issues: 1) There are a number of clarification points the short quiz doesn't take into consideration; and 2) The loan servicer may be applying a second set of internal qualifying requirements on top of what the government guidelines require. We are definitely seeing this on the refinance program, and I believe it's happening on the modification program as well.

Q: It seems that I qualify for everything on the programs except for the way I qualified when I bought my home: on a stated income program. Why would this disqualify me?

A: Unfortunately the program limits participation by those who used a "Stated Income" loan to qualify for their existing home loan. I went a bit overboard on a rant about this in a separate posting, which you can read here. Suffice it to say that I see this as one of the biggest issues with this program and hope they address this. But for now this is an issue.

Q: I contacted my lender about a loan modification because my income has been reduced substantially but they told me I did not qualify because I am current on my payment. Why am I being punished for being responsible?

A: The way I read the modification program, being delinquent on your house payment is not a prerequisite for qualifying; however, I have heard from many people that their lender will not consider a modification for them, that their only option is a refinance and that has typical income qualifying guidelines. So the person hoping to qualify for the modification is typically not the same person hoping to qualify for the refinance, which is limited to reducing the interest rate -- more or less.

Recommendation: Stay with it. If you are in danger of becoming late or are already late on your monthly payments, contact a HUD counselor immediately by calling 1-888-995-HOPE. Stay in communication with your loan servicer. Even considering talking to your State Attorney General and talking to your state's congressional representatives. There is clearly a high level of resistance to implementing these programs. Making your voice heard!

Other entries on this subject:
Original: The Home Affordability Refinance Program posted 3/04/09
Update: Making Home Affordable Part II posted 3/30/09
Rant: Don't disqualify someone because they had a stated income loan! posted 4/16/09

I will continue to add FAQs to this post. Comments are welcome! --James Wirth

For any fellow Princess Bride fans, that classic line can be used in myriad ways. In this case, I'm absolutely flabbergasted that we haven't seen an increase in mortgage rates. In fact, they might have smidged down. This is to me absolutely, positively, and unequivocally, inconceivable.

Oh no wait, now they're up again.

Oops -- they've inched down. Now back up.

And so it has gone for the past couple of weeks -- down a smidge, up two smidges, down half of a smidge, and so on. Rates are basically unchanged and vary by down payment, loan program, discount points etc. anywhere from 4.5% rate/4.75% APR to 5% rate/5.25% APR for a 30-year Fixed, .25% more for cash-out, etc. etc.

I will say this -- loans are taking longer. It's better to get all of your paperwork in, submit for approval, and then wait for a while if necessary -- all too often it's the other way around, buyers will wait to submit their paperwork and then it's a mad scramble to get everything done on-time.

Don't get me wrong, I like a scramble just as much as the next guy or gal. Throw some green peppers, onions and mushroom in there and now we're really talkin'!

Not so much on my loan scenarios though. Not so much there.

Thanks for reading! --James Wirth

P.S. I apologize if I made you hungry and you still have a few hours before your next meal.

I could hardly contain myself.

FINALLY, after all the discussions on proper etiquette and respect and etc. etc., the days of torture were over. There they were, lined up along the wall in all their glory.

It was like I was at opening day at Kentucky Derby - anxious energy, nipping at the other horses, chomping at the bit ...

The gates flung open and I dashed across the room. I had spent literally minutes mapping out my strategy to get to the right section. Past the flutes, dodge the baritones beyond the trumpets and just before the clarinets.

First to reach the line-up I went straight for the coolest instrument I had ever seen - the saxophone. With several to choose from and the rest of the pack closing in - I grabbed the biggest one I could find: A TENOR!

That was 7^th grade. I actively participated in marching, pep and concert bands throughout middle and high school. I was the proverbial band geek. Ahhh, those were the days.

Nevermind the 2,700 bus rides I would carry that tenor saxophone back and forth to school and besides, I became stronger because of it - literally, that thing was heavy. And besides... it always impressed the girls more. Yeah, I was cool.

In fact, I must give credit to that fateful tenor sax and the path it put me on for attracting my future wife, who by the way, happened to be an ex-cheer leader. Who would've thunk - a cheerleader! I kept my secret identity carefully hidden of course, until she had fallen madly in love with me. It's band ‘geek' after all, not band ‘jock.' I kid, I kid! Please don't stuff me in the locker again... it broke my reed last time...

The only reason she eventually found out I was a closet band geek was by accident and actually involved a real closet - we were cleaning out a closet at my father's and she uncovered my old letterman's jacket. Before I had a chance to protest she pushed back my toga (don't even ask) to reveal the jacket front proudly displaying the two events I lettered in... the first one was Golf (thank you Tiger Woods for making one of my events ‘cool') and yes, my band letter and its' two bars. The only reason why I didn't letter 3 years was because as a senior I branched out. You guessed it -- Choir.

As "After School Special" as all of that sounds, music truly has had a profound impact on my life. I am a better person because of my musical pursuits, and I would like to take a moment to pay tribute to the tireless band teachers in our education system. Though it may seem like a thankless job, this tenor saxophone player owes you his gratitude. Mr. Demau, my first band teacher (I hope I'm not butchering your name but hey it was 7^th grade); Mr. Acox, long-time Garfield High School band director and local jazz legend, thank you for letting me hide in your band room, Mr. Mao, you gave me the courage to branch out and even attempt to learn the bass clef, which I failed at miserably but that was my fault, not yours. Gentlemen, I'm still making notes... now they happen to be mortgage notes, but notes nonetheless. Thank you for your contributions to my life.

In our current economic climate where schools are slashing costs everywhere they can to make cuts to their budgets and keep their doors open, refreshing the school-owned musical instrument supply certainly can't rank very high on the priorities. Music budgets have been retracting over the past several years, even when the economy was doing well! Contributions of musical instruments to school programs is more important now than ever.

Donating instruments your family may no longer be using can really make a difference to a young person who may not have an opportunity to gain access to an instrument otherwise.

Another person who had a significant on my life both musically and otherwise, is my Mom. As a single mother supporting the two of us, she scraped together enough to rent a saxophone for two years. The rest of the time we were lucky enough to have instruments available from the school.

If you are in the Puget Sound area, there is a new program called Instruments for Kids. It's currently focused on the Edmonds School District and will branch out to other districts as early as next year (the more successful the program the sooner other schools will join). Please consider donating unused instruments to this needed and worthwhile program. We can make a difference in the lives of our youth, one instrument at a time. It certainly made a difference in mine.

If you are in or close to South Snohomish County, donations can be made to the Edmonds or Lynnwood Coldwell Banker Bain Real Estate offices:

Edmonds
108 5th Ave S
Edmonds, WA 98020

Lynnwood
4100 194th Street SE, #135
Lynnwood, WA 98036

For additional drop-off locations or for more information, please Instruments for Kids by phone at 425.890.2002 or by email at instruments4kids@cbbain.com

As always, thanks for reading. And thanks for supporting Instruments for Kids!

Instruments for Kids: What's in YOUR closet?!?

-- James Wirth

Yes yes, another trek reference. Not that anyone's counting *sigh*

The week started lower, held at the hump and lost momentum in the last couple of days. Here's where we wound up:

4.875% Rate / 5.026% APR
Loan amount: $417,000
Down payment/equity: 20%
Loan program: 30 Year Fixed
Minimum credit score: 720

Everything points to this being the bottom for rates -- well, except that ONE Bank of America announcement that said they expected 4.125% rates. Hey BofA, here's an idea -- take that TARP money and MAKE NEW LOANS!

Ok, I apologize. My usual diplomacy is nowhere to be found.

Thanks for reading!