Message from Donna Petrocco, President
We’re Part of the Solution, Not the Problem
Much has been written about the turmoil in the subprime mortgage market and consumers may be worried about what it means to them. It may be helpful to consider the big picture.
In the entire housing market, 35% of homeowners own their homes free and clear. Of those with mortgages, 94% are paying on time. That’s good news! In the subprime market, which constitutes about 14% of the total housing market, 85% are paying their loans on time now. As many adjustable rate mortgages reset in the next several months, delinquencies may increase, causing this number to slip. The majority of subprime loans are performing. That suggests most subprime borrowers have good loans that they are capable of repaying.
What about all those subprime foreclosures we’ve been reading about? For the most part, these are the result of risky loans made and supported by unregulated participants in the mortgage market such as mortgage brokers and investors who purchased the loans on the secondary market. Highly regulated commercial banks and savings institutions have refused to make the sort of risky loans that are at the heart of the issue. These financial institutions adhere to the fundamentals of safety and soundness, sound underwriting standards, due diligence and capital standards.
Federally insured banks, like Valley Bank & Trust, are able and willing to be part of the subprime solution. We are well capitalized and have a diverse source of funds, including deposits and Federal Home Loan Bank advances available. We are in a solid position to keep mortgage dollars flowing to creditworthy borrowers and communities.
Whether a first-time home buyer or a borrower refinancing an expensive loan, you will serve yourself well if you start your loan search here. Our lending professional will sit down and evaluate your options. We are interested in long-term customer relationships, so we won’t try to sell you a loan you cannot afford. We’ll make a loan that’s right for you and for us. We’ll do what’s right for the community and economy at large.
*Information provided by the American Banker’s Association.
Financial Literacy
Time to Save!
Each April, bankers from across the nation join forces for “Teach Children to Save” Day. Volunteers armed with important information provided by the American Bankers Association Education Foundation, go to local schools to encourage students to save money. In light of conversations I’ve had with customers lately, this information might be just as important for adults as well. Now is a time when we are all cutting back on spending--perhaps it’s time to save.
Here are three simple steps that the Education Foundation has established for you to consider:
- Make the decision to save and set goals (short-term and long-term)
- Decide how to save (save your income or reduce your expenses).
- Establish and stick to a regular savings plan
- Pay yourself first
- Commit to saving a specific dollar amount each month
- If you receive a raise, increase what you’re saving
- Pay off your debts
- Talk with anyone at Valley Bank & Trust to arrange for an automatic transfer of money from your checking account to your savings account
- Consider automatic payroll deductions (we can help you set this up, too).
There are several ways to save your money:
- The most widely known is a Savings Account. The longer you can save money in this account, the more it will grow.
- Another way to save is with a Money Market Account. The interest rate pays a little more in this account and you’re allowed to write limited checks on it.
- Finally, you can put your money into a Certificate of Deposit (CD). This type of account pays the highest interest for a specific amount of time.
All of these types of accounts are insured by the Federal Deposit Insurance Corporation (FDIC) up to $100,000, so your principal and interest are always safe!
If you are looking for other investments, you may want to consider looking into products offered in our Trust Department (Mutual Funds or IRAs).
The important thing is to get started right away to watch your money grow and your dreams come true! Contact us to help you get started.
*Information provided by the American Bankers Association Education Foundation.
Customer Connections
Referral Reward Program
Do you share information about your favorite restaurant or new movie or the exceptional personal service you receive at your bank? Your endorsement is the highest compliment any business can receive.
To recognize our customers who refer new business to Valley Bank & Trust we now offer referral rewards. The customer you refer will receive a $10 deposit into their new account. As the referring customer you have the option of a deposit into your Valley Bank & Trust account or a donation in your name to your favorite charity.
The reward amounts are:
Personal Checking--$25 per referral up to 4 referrals; $40 per referral for 5 or more referrals
Business Checking--$50 per referral up to 4 referrals; $70 per referral for 5 or more referrals
Loan--$100 per referral - excluding real estate based loans
Valley Bank & Trust is committed to delivering service worth talking about. While we can never thank you enough for telling your family, friends and coworkers about us, we hope the Customer Connections referral rewards program will let you know how much we appreciate your business.
Understanding Reverse Mortgages
Your home is many things--safety, independence, and memories to name a few. Now, with a reverse mortgage, it can also be a source of money. A reverse mortgage can meet financial needs and insure that you can stay in your home as long as you choose. Here are some of the frequently asked questions about this program.
What is a Reverse Mortgage?
It is a loan against your home that does not have to be repaid as long as you live in your home.
What is so unique about this program?
You make no payments. It is a loan in reverse. Instead of making payments, you receive them.
Will this loan affect my Social Security or Medicare?
No. Absolutely not.
Will I have to pay income tax on the money I receive?
No. The money is considered “proceeds of a loan” and not taxable.
How much do I qualify for?
It depends on your age(s) and the value of your home, as well as the interest rate at the time of closing. The older you are the more money you get.
When is the loan due?
The loan is due when you and your spouse no longer live in the home as your primary residence.
Do I have to own my home free and clear?
No. Even if you have an existing loan you may qualify.
Who will own my home if I get a reverse mortgage?
You remain the owner.
Can I sell whenever I want?
Yes. You or your heirs (in the case of your death) keep whatever equity is left after the home is sold.
Are there restrictions on how I use the funds?
No. It’s your money--you decide how and when to use it.
Should I shop for the lowest interest rate?
No. All reverse mortgage lenders must use a rate established by the program. You won’t find a better rate with one lender over another.
Is it hard to qualify?
No. You and your spouse must be at least 62 years of age, live in the home, and have a certain amount of equity in the home. This is not a credit based loan. Credit scores and income are not considered like on a traditional mortgage.
How can I be sure it is right for me?
A meeting with a HUD approved housing agency is required. They will sit down with you (and your family, if you like) to explain this program from an impartial third party perspective.
As good as they have been for some homeowners, a Reverse Mortgage may not be right for you. It is best to do your research and talk with a HUD approved counselor in your area and then make an educated decision.
Please join us for an information session about Reverse Mortgages on Jnauary 19 at 9:30 am at our Bromley Park branch. Or, contact Matt Wilson, Valley Bank & Trust’s Mortgage Lender, at 303.659.5735 anytime to learn more about Reverse Mortgages.
Locations
Equal Housing Lender
