The first peculiarity about this refi boom is that it caught the industry off-guard. Mortgage brokers spent 2008 either closing down or laying off much of their staff. Lenders, too, laid off staff – as much as 50-70%, including underwriters. Entire operations divisions were closed, and many lenders simply went out of business. First it was small, sub-prime shops, but it quickly escalated to larger lenders like Lehman Brothers and Indymac Bank. So, by December 2008 there were few brokers and few lenders, and few underwriters in the employ of those lenders. The result: a real skeleton crew.

And then the tsunami hit. First, thirty-year fixed-rates hit the magic 5.25% mark that borrowers had been waiting on for over a year, and shortly after, rates fell below 5%. Ever try drinking from a fire hydrant, or running a 100-yard dash the moment you wake up in the morning? Yeah, it was like that. Suddenly, brokers were flooded with phone calls, and began sending massive numbers of loan applications to lenders who had just a few underwriters left on staff.

To add to this, after January 5^th the new Fannie Mae appraisal guidelines hit. These guidelines required that appraisals be ordered from national appraisal companies (as opposed to directly from local appraisers), and be subject to an independent Quality Assurance review. The result? Much longer turn-times.

Many local appraisers, anticipating the new Fannie Mae guidelines, went out of business before Jan 5^th or teamed up with a national appraisal vendor. The result? The appraisal industry was significantly understaffed when the tsunami hit.

What this all adds up to is long turn-times. Whereas borrowers, brokers, and lenders have been accustomed to three to four week closing times, now it can take as much as two months.

Further, lenders are now really cracking down on rate shoppers who “double-app” (ie submit multiple loan applications to different lenders). Many mortgage loan shoppers don’t appreciate this, but when a rate is locked a contract is created in the form of a promissory note, and immediately following formation of that contract, the lender has begun placing that note (i.e. “I agree to pay lender 5.00% on a $400,000 loan for 30 yrs) into its pool of other notes. That pool of notes is immediately being negotiated for sale with large investors. So, when a borrower locks a rate and then goes somewhere else, it’s much like ordering a dinner at a fine restaurant, then deciding you don’t want it when it comes to your table.

As part of this crack down on “double apping”, lenders are requiring complete loan packages be delivered within about two weeks of the rate lock, or the lock is cancelled. This means title work, appraisal, and borrowers’ W2s, bank statements, and paystubs must all be submitted. Further, the onus is on the broker; if the locked loan does not close, the lender threatens to terminate the broker relationship – that is, the broker will not be allowed to use that lender. Thus there is much more required of the borrower these days before a rate can be locked.

So, friends, we are in a much different world than we were just a few months ago. Turn times are three times longer, and application packages must be much more complete than before at time of rate lock. In past refi booms we could order an appraisal and lock a rate without an application or supporting documents, and sometimes without even a property address! Those days are long gone.

What does this mean for you? Well, if you’re considering refinancing at some point in the next 90 days, start the process now to get all your ducks in a row. Submit a complete application and supporting documents so the file can be underwritten and the appraisal and title search ordered. Once the credit and collateral (appraisal) packages are underwritten and approved you can just sit and wait until the rate gets to where you want it to be, then lock it in and close in a few days. If you wait to apply until rates drop, it may take you a couple of days to gather all the information you need to lock the rate (and in the meantime, rates may have increased). Additionally, if you wait, you may not be able to reach anyone when you’re ready to lock; if rates drop back down to 4.5% most mortgage brokers and lenders will be completely swamped (many already are), and will not be able to answer their phones, let alone quote you rates and closing costs and take an application and get the file underwritten and order an appraisal and lock the rate.

I hope this has helped. I’m not trying to pressure you, but I feel that I have an obligation to give you my perspective on what is happening in this never-before-seen market.

Christopher Cruise is a Senior Loan Officer with GOTeHomeLoans, as well as author of various mortgage manuals. He currently serves on the Board for the National Association of Responsible Loan Officers.

The recent Cost vs. Value Report showed that renovations on a nationwide basis held their value better than home prices did in 2008. According to the National Association of Realtors (NAR), home prices declined 7 percent in 2008, while the value of homeowners' investments in remodeling dropped only 2.8 percent in 2008.

During slow real estate cycles, many would-be sellers postpone their move and remodel instead. This makes sense as long as the projects are selected carefully for maximum return on the investment. It's important to avoid renovations that would overimprove the property for the neighborhood.

One benefit of remodeling sooner rather than just before selling is that the homeowner is able to enjoy the improvements before moving on. All too often, sellers wait until right before they put their home on the market to enhance its appeal.

HOUSE HUNTING TIP: Remodeling, if done smartly, can result in a quicker sale and less negotiation with buyers over perceived shortcomings. Painting the house and updating the kitchen, baths, lighting fixtures and floor coverings are examples of improvements that can improve the sale price.

In today's slow economy, there are more contractors looking for work in some areas. And, in some cases, their prices have come down. This positively impacts the return on investment when the home is sold.

Recently, an Oakland, Calif., homeowner received a bid of under $20,000 for a midrange kitchen remodel. Four years ago, he received a $45,000 bid for the same work, but decided against going ahead with the project because of the cost. Now that he's ready to sell, he's planning to do the midrange kitchen remodel to enhance the salability of his home.

The amount of return from a remodel investment that is recouped when the property is sold varies significantly from one place to the next and from project to project. For example, nationally, 70.7 percent of the cost of a major kitchen remodel was recouped at sale.

In the Pacific region (Alaska, California, Hawaii, Oregon and Washington), a major kitchen remodel returned 95.5 percent. In San Francisco, a major kitchen remodel returned 131.5 percent of the investment at sale. Despite higher labor and material costs, The Pacific Coast average cost recouped at sale was 14.8 percent higher than in the rest of the country.

Smaller cities such as Jackson, Miss., and Billings, Mont., had high rates of recovery due to lower labor and material costs.

Nationally, exterior improvements generated the biggest payback on average. A midrange deck returned 80.8 percent. Upscale fiber cement siding returned 86.7 percent. A midrange minor kitchen remodel returned 79.5 percent. And upscale vinyl windows returned 79.2 percent. These projects increase curb appeal -- an important selling feature for most homebuyers.

The data used to generate the Cost vs. Value Report was obtained from surveys sent to more than 150,000 appraisers, real estate agents and brokers in July and August 2008. The cost data was obtained from HomeTech Information Systems, a remodeling estimating software company. The confidence level of the results is 99 percent, plus or minus 2 percent, according to NAR.

Homeowners who are concerned about the resale value of their home should first consult contractors to obtain estimates. Then consult with an experienced local real estate agent for input on the estimated cost recovery of the anticipated improvements before moving forward.

THE CLOSING: Sellers often spend too much on improvements, or make improvements that don't add value at sale. Some improvements can actually decrease value if they are so specialized that they don't have broad-based appeal.

Dian Hymer a nationally syndicated real estate columnist and author of "House Hunting, The Take-Along Workbook for Home Buyers" and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books.

But how valuable are warranties? Do they cover what you think they do, and can you rely on them to really protect your financial investment in the event of a problem? The truth is: probably not as much as you'd hoped.

READ, READ, READ

The first thing you need to do with any warranty is to request and read a copy of it before you make your purchase. Some warranties are very simple and straightforward, and others are lengthy, convoluted and fraught with legalese. Nevertheless, you need to read it to the best of your ability.

One of the first things you will notice about virtually any warranty is that it is tied to very specific steps that must be followed by the person installing the product, whether it's you or someone you hire. Failure to follow the steps exactly will typically result in the warranty being void, and this is a common pitfall that many homeowners -- indeed, many contractors -- fail to take seriously enough.

A careful examination of the warranties offered by many building material manufacturers will turn up language that states, in one form or another, that the warranty applies only to structures on which the product has been installed, finished and maintained in accordance with the manufacturer's specific instructions, and that deviation from those installation, finishing and maintenance instructions will render the warranty null and void.

Some of the things you need to be very aware of that can void a warranty include:

• Inadequate protection during storage, which includes how the product is protected from ground moisture, dirt and dust, weather, impact, and other specifics.

• Improper spacing. This would apply to products such as siding or shingles, where you have left gaps that are consistently too large or too small.

• Improper fastening, which includes the gauge, length and style of the fasteners you use, the depth of their penetration into the wood, the spacing between the fasteners, and even the amount of air pressure used with air-driven fasteners.

• Finishing. In the case of siding and some other materials, it must be finished (painted, stained or otherwise protected from the elements) within a certain time frame, using approved materials and approved application methods.

• Maintenance. Many products also tell you what steps you need to take to maintain them properly, and failure to follow those steps can also void the warranty.

WHAT DO WARRANTIES COVER?

What a specific warranty covers varies from manufacturer to manufacturer, and can even vary within the product lines offered by the same manufacturer. Some of the more important things to be aware of are:

• What is the term of the warranty? Some warranties last only 30 or 60 days, while others are for the expected life of the product, which might be 50 years or more.

• Is there depreciation? Longer-term warranties, such as those on roofing, are typically depreciated based on the product's expected life span. For example, if you have a composition shingle with a 30-year warranty and it fails after 15 years on the roof, it's common that the replacement value will be depreciated by 50 percent.

• Does it cover labor? Many warranties will cover the cost of the product itself, but not the cost of the labor to remove and dispose of the failed material and install the replacement. Some will cover removal but not replacement, or vice versa.

• What steps are required? If that new faucet fails as soon as you install it, can you take it back to the store for an immediate replacement, or does the manufacturer insist that it be sent back to their facility for possible repair?

With any warranty, do your homework. Obtain and read a copy, and if you have questions about it you need to discuss it with your dealer or your contractor. If they are vague or unsure about answering your questions, ask for the phone number of the manufacturer, and call them directly.

Remodeling and repair questions? E-mail Paul at paul2887@ykwc.net.