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Current mortgage situation-interview with Kathie Lattin

By
Real Estate Agent with Associated Brokers Of Pagosa

As a REALTOR® operating in Pagosa Springs, my business is tied very closely to the mortgage industry.  The shifting tides of rates and corrections have left me dependent on my "daily fix" via the Internet to try and maintain some understanding of current mortgage conditions.

Thankfully, I don't have to go this alone. Recent news of fairly significant rate changes whet my appetite enough to seek out someone who really knows what's going on.  Kathie Lattin of First Southwest Bank was gracious enough to give me a few minutes of her time this week. Kathie is the vice President of First Southwest Bank and has been with them for 17 years. The following is from an interview with her:

Chris: "Kathie could you give us an overview of what has happened in the last few years in the mortgage industry?"

Kathie: "We hit the big turbulence when the sub-prime market dropped - because too many people over-borrowed for their ability, which has really hurt the housing market. There are a lot of houses out there for sale. The inventory is available but the qualified buyers are becoming more picky.

"The programs have all changed. Obtaining the 100% financing is getting a lot tougher. Mortgage insurance and extra costs are still appropriate to what you are doing. You can do 80/20 purchases or 90/10, whatever you want to do, but a lot of them aren't offering second mortgages anymore - so you can't do a first/second combination. Most of them only go up to 90% on the first. So to get the 100% you usually have to go to an in-house portfolio or have mortgage insurance."

Chris: "I understand that last week the long term mortgage rate dropped. Can you give me a basic scenario of what that means for the borrower on a $350,000 home."

Kathie: "This rate drop was put into place to help stabilize the core market. Last week with an interest rate of 6.25% a borrower would have made a principal and interest payment of $2,155, where today with a 1% origination fee your looking at about 5.5% which drops that payment down to $1,987. So we are seeing significant monthly payment changes from the interest rate drop."

Chris: "The big news this  morning is that the Federal Reserve cut the short term interest rates by 75 basis points. Will that have any effect on long term mortgage rates?"

Kathie: "Not on long term mortgages, but on short term borrowing. The cut was made in hopes that consumers will get out there and borrow more short term money- your credit card, in house accounts, home equity line of credit and that sort of thing. If they pull it down then people can therefore buy more and get the economy back going.

Chris: "It seems that I  am starting to see more attention on some of the homes between about $200,00 and $250,000 in the recent weeks. Can you offer any reason for this concerning mortgages?"


Kathie: "We are seeing a shift in the people that are able to qualify for these loans. Rates are coming down. We are at a low even for what it was two years ago...so this is making those loans available. What we have to do as REALTORS® and Lenders is consciously put the right person in the right home. Not over extend them, we can almost qualify them for anything. The 100% is still out there but we need to know they can truly afford this so that were not flipping or doing foreclosures a year or two from now. We have to justify to our customers, we are here for the long haul."

Chris: "For the borrower with an average credit score what rate can you give them right now?"

Kathie: " Probably 5.875% with no origination fee and 5.5% with an origination on a 30 year fixed rate mortgage."
 
Thanks to Kathie Lattin for her expert insight into the mortgage industry. I highly recommend her for her professional efficiency and strait answers when it comes to home loans. She can be contacted at kathie.lattin@fswb.com or call 970-731-1300.  Learn more about First Southwest Bank at their website.

Chris Liverett
Chris Liverett lives in Pagosa Springs with his wife Rachel, daughter Sierra and son Cedar. Serving as Director on the Pagosa Springs Board of Realtors he helps buyers and sellers of real estate find one another, as part of Associated Brokers of Pagosa and Jerry Driesens Real Estate.  You can learn more about Chris at his web site.
Charlie Ragonesi
AllMountainRealty.com - Big Canoe, GA
Homes - Big Canoe, Jasper, North Georgia Pros
Nice post and great interview. It is important  to have all this information
Jan 24, 2008 09:50 AM
Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth
Great update with the dialog Chris. The lower rates have got to help the homebuyers and refi's.
Jan 24, 2008 10:06 AM
Joanne Hanson
Coldwell Banker Colorado Rockies Real Estate - Frisco, CO
Summit County, Colorado Realtor
Great idea Chris!  I might have to borrow that idea if you don't mind!  I bet this got some attention on your outside blog.
Jan 25, 2008 02:37 PM
Chris Liverett
Associated Brokers Of Pagosa - Pagosa Springs, CO
Pagosa Springs Real Estate
Joanne- Thanks it has really helped the phone ring a little, and given me some ideas for the future! Especially for the newspaper I wirte for. It also helps solidify my knowledge of the subject(s)- I highly recomend stealing it!
Jan 26, 2008 10:21 AM
Floyd Magee
ERA Four Corner Real Estate - Farmington, NM

I was just talking to a client building a new home in Ridgway. He said that when he converts his construction loan to a permanent, relatively soon, that his broker told him it could be under 5%!

We are some of those clients she was talking about. My wife and I just refinanced in December and got 5.8% with no points. We are also going out and get an equity line of credit because of the great rates.

Great interview and one we should all be having at least quarterly to stay up with the lending market. Thanks Chris!

Jan 26, 2008 11:32 AM
Lorraine Bennett
Future Home Realty - Saint Petersburg, FL
YOUR Tampa Bay Realtor

Thank you.

Oct 30, 2009 03:30 AM