Paul McFadden Mortgage Loan Officer Bellevue Washington Home Loans

I'm sitting here on an absolutely glorious day in Bellevue, Washington writing this mortgage market report. We've had the nicest summer I can remember and there appears to be no letup. I hope the same can be said of you wherever you are.

I think the market is picking up, albeit slowly. We're probably always the last to get hit and the last to turn around. That being said, things were probably never as difficult as in other parts of the country. But we did have a big slowdown here just like everywhere else. This summer marks the first time since 2007 that there has been increased activity.

My company, The Legacy Group, is having a banner year. Refinancing activity has almost stopped but the purchase market is heating up. I think it's a combination of things. One, the first-time homebuyers tax credit of $8000 will expire on December 1 of this year. So first-timers want to get in on that. Two, existing buyers (move-up buyers) are sensing an opportunity to get the house of their dreams for much less and with a lower payment than before.

Our Puget Sound market is still flooded with bank-owned, short-sale, and foreclosure homes. The estimate is up to 40% of the inventory is distressed property. And the builders aren't building yet. I suspect the ones left will start again slowly next year. In other words, I'm seeing more confidence and interest in our local area. With interest rates expected to remain low for the balance of this year and inventory plentiful, home sales should continue to recover.

What are you seeing in your neck of the woods? We'd all like it to be a little more normal but I'm encouraged nonetheless! Thanks for reading this Bellevue, Washington mortgage market report!

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Hi all: Lately I've been feeling very grateful for my lot in life. No, nothing's wrong. I just am thankful for so many things in my life. Was I always? Probably not. When I was younger, I'm sure I took more than I gave. Those of you who are younger and understand the wonderful concept of giving without expecting, bless you!

Yesterday I sent a simple email to everyone in my database thanking them for their friendship and support through the years. I received quite a few responses back which was gratifying. It made me realize how truly lucky I am.

What about you? How many things are you grateful for? I was thinking today that my list is growing every day. And if you haven't reached out to thank someone recently, what are you waiting for? Thanks for reading. Have a wonderful weekend!

Good afternoon all! I hope you're well. A little over a month ago, I blogged about mortgage rates increasing drastically in the space of a few days. They literally went from 4.75% for a 30 year fixed mortgage O.A.C. to 5.5%. The reasoning seemed to be that the government stopped guaranteeing the purchase of mortgage backed securities. Thus, the sudden rise in rates.

Fast forward to today. Rates today are at 5% for a 30 year fixed conventional mortgage which is actually 1/8 point worse than yesterday. So rates have improved again. Expect continued volatility as the markets (especially oil) try and find their medium. My apologies to Kathy Toth who commented here. She asked me for an update the following week after I blogged about rates rising in late May. I thought mortgage interest rates might come back down fairly soon. In reality, it took a little over a month.

So what happened? Why the sudden downtick in rates? The big news was the economy where things didn't appear to be recovering as quickly as the pundits hoped. Once again, the stock market is off and oil prices have plunged by $10/barrel as of today. My company recently had Barry Habib (many of you may know him as one of the foremost mortgage analysts in the country) in for lunch and he predicted that mortgage interest rates may go back down to what we got used to this past Spring (think close to 4.5% for a 30 year fixed). Granted, Barry has been wrong and admits it. But I do agree with him about the fundamentals.

So...hold on to your hats! I think we may see lower rates again. But this will probably be the last time. As Barry Habib said, our worst enemy is inflation. And that's probably going to rear it's ugly head sometime next year. To combat that, the Federal Reserve will probably raise short-term borrowing rates to combat that. Yes, I know this doesn't have anything necessarily to do with mortgage interest rates (they're determined by the price of the 10 year treasury note) but if the economy starts recovering, look for mortgage interest rates to rise. I personally expect rates close to 7% or above a year from now. I will keep you posted. Those of us in the business would frankly like a little more stability but that's the nature of the game right now! Take care.

Hi all: I hope you're well. I just got off the phone with a borrower who didn't want to comply with what we needed to close their loan. I emailed the section of the underwriting handbook to him; hopefully that will get him to cooperate.

Things have changed drastically on the underwriting side the last couple of years. Borrowers who haven't had a loan in a while remember the good old days where a high credit score and lower loan-to-value was all that mattered. I hear comments again and again about how they've never had to provide this much information.

Today, I was accused of "information gathering". Frankly, that's ridiculous. Those of us in the business know that information is only shared with the lender and that's it. Almost all of my borrowers have been very understanding of what is needed to get a loan these days. I was talking with one of my co-workers recently and we actually agreed that it's easier to have cooperative customers because their mindset is they're excited they can get approved at all!

That being said, understand that we in the loan business are as frustrated as you are. If you think for one minute we enjoy asking you for that one additional piece of information, you're crazy! We do it because compliance is everything and the risk is too high if we don't have a complete file. In closing, thanks for your cooperation and understanding. There will be a time where we might not need so much from you. That will be welcomed by everyone. In the meantime, we'll get your loan done. It just may take a little more patience than usual. Thanks for reading!

Hello all: I hope you have great plans for the weekend. Here, it's beautiful once again. We've had a fabulous streak of nice weather.

I seem to be increasingly encountering difficult underwriting guidelines. I'm curious if you're seeing them too. The latest was on a loan that was supposed to close next week. Now, I'm not so sure. My borrower wanted cash out on his primary home. The problem was he recently took it out of an LLC (he had to in order to get the loan). When we tried to do a cash out refinance, it was approved by my underwriter initially and then nixed by the lender as these types of loans require six months seasoning on title. I know this rule has probably been in effect for the past year; the thing I asked my underwriter is why didn't we know this sooner. Her explanation was she just found out when submitting to the lender.

I heard recently that one lender was taking 78 days on average to close loans. We lock all ours for 55. What I'm seeing is our underwriters (we underwrite in-house) are bogged down by checking so many guidelines before issuing an approval. And sometimes when the approval is issued, the conditions can't be satisfied right away.

I have to admit it gets a little frustrating at times. I've heard this recently. We're all working harder for our money. I recently had to find a home equity line of credit for a borrower because they forgot about a dormant one they had on their home. Of course, they wanted to keep it but the lender wouldn't allow that. So I took the time to call a banker friend of mine to set my borrower up with a new line of credit.

It probably sounds like I'm ranting here but so be it. I love what I do and plan on making this a long-term career. If you're on the other side, please have patience. Those of us in the loan business will get your loan done. It's just taking longer. Hopefully the "oh by the ways" will diminish as we continue this economic recovery. Have a great day!