Steve Knox

December 1st, 2008

Question: Columbia Funding Mortgage predicted the historically low interest rates that surprised consumers on Tuesday, November 25th.  On what did you base this prediction?

Steve: We closely monitor mortgage backed securities and the release of key economic reports to provide our clients with credible information about the trends in the mortgage market.

Question: In our October interview you urged your clients to sign up for your reserve a rate program. This time around were you able to quickly respond to the low interest rates for your clients?

Steve: We have already locked in about 20 clients who had instructed us to monitor and “reserve a rate” for them. However, with the Thanksgiving holiday we anticipate that many more clients will contact us early next week.

Question: What have you done to respond to this unprecedented refinance demand?

Steve: We planned ahead and have prepared our clients. We are taking late evening and weekend appointments. Most importantly, we are locking all of our loans for 45-60 days.

Question: Why is locking longer term so important?

Steve: Because of our experience, we know what happens in a refinance boom. Lender’s become back logged and rate locks can expire before the loan closes. We protect our clients by locking long enough to ensure the rate promised is the rate delivered and a stress free transaction.

Question: Do you think these low rates will only last a few days the way they did in January of 2008?

Steve: Our assessment is that 30 year fixed interest rates will below near or below 6% for at least a couple of months but that interest rates will be volatile during this period and we may see rates as low as they were this past week.

Question: What advice would you give to consumers now that these low rates are here?

Steve:
1) Do not get greedy! Know what you want and take it when it is available.
2)  Partner with one trusted mortgage adviser who understands the relationship between interest rates and mortgage bonds and instruct that lender to monitor rates for you.
3) Use the “reserve a rate” program
4) Use a local lender who has a vested interest in keeping you as a long term client and earning your future client referrals.

Steve Knox

Question: I recently heard that on January 23rd, 2008 there was a mini-refinance boom in which the 30 year fixed rate dropped to 5.000% (5.124apr). Why was there not more news about this at the time?

Steve: Primarily because the news at that time was about the “mortgage crisis”, and good news did not fit that story line. In addition, the rate drop was brief and most borrowers did not have a chance to respond.

Question: Were any of your clients able to take advantage of the drop in rates?

Steve: Only a few. Some of our clients had positioned themselves for success by authorizing us to lock a particular rate no matter when it happened. Needless to say they are very happy today.

Question: What about your other clients? Did you not call them to share the news?

Steve: Rates can change by the minute and by the time we called the client, set up a meeting and they made their decision, the opportunity was gone. Other clients got greedy and said they wanted to wait until rates went even lower. Within two days rates were back to normal levels.

Question: So, in spite of all the recent negative mortgage press, people with bad mortgages or high rates missed an opportunity to lower their monthly mortgage payments?

Steve: Yes. However future opportunity still exists and in fact we at Columbia Funding Mortgage believe that current economic indicators are right for another significant drop in rates. We may see historically low interest rates in the near future.

Question: What can borrowers do to prepare and not miss this opportunity?

Steve: They need to sign up for our no obligation “Reserve-a-Rate” program
1. Submit a no obligation online application to www.CFundingMortgage.com
2. Set up a meeting so we can assess their situation and determine what rate and loan program fits their situation
3. Agree to a rate lock scenario and instruct us to monitor and lock when rates reach that level

Question: What if they agree to a lock at a great rate and things get better?

Steve: Part of making good financial decisions is to know what you want and take it when you can get it. Otherwise the lure of potentially saving a few dollars in closing costs or monthly mortgage payment could cost a consumer tens of thousands of dollars over the life of a mortgage. The best strategy is to build a high trust relationship with one of our loan officers and follow the “Reserve-a-Rate” program.

Question: Do you have any other words of wisdom?

Steve:  Yes. We are experts in monitoring the mortgage backed securities market and economic reports to make an educated assessment of what will happen with mortgage rates. Shopping for a mortgage rate is not like shopping for other products. Calling a bank or mortgage broker and asking about their rate is a terrible strategy because credit scores, closing costs, loan to value, loan type, and property-type all determine the actual rate a client qualifies for. Columbia Funding Mortgage will not even quote a rate without knowing customers information. The best strategy is to a) know your situation
b) determine what you need c) know what qualification factors will impact your rate, and d) let us do the work for you.

Question: When should consumers start thinking about setting up a meeting with you?

Steve: Now. Use advanced planning and our mortgage financing experts to “Reserve-YOUR-Rate”

Question: What about borrowers who are in trouble with their current mortgage?

Steve: Right now there are some solutions so do not give up hope. Recent legislation helped, but did not go far enough in providing solutions. Set up a meeting with us and we will determine if we can help now. If not, we anticipate additional, more comprehensive legislation in the near future. So, much like the “Reserve-a-Rate” program, we suggest clients start working with us now so they are ready to move forward when the right solution becomes available.