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April 2016

Hey Mom & Dad….

Military Service Academy Nighservicepatcht

Want to know more about attending our nation’s service academies?

Interested junior high and high school students, parents, and school staff are invited to learn about what the service academies (United States Naval Academy, Air Force Academy, United States Military Academy – Westpoint, and Merchant Marine Academy) have to offer.

On Friday, April 22, representatives from Susan Davis’ office will join Congressman Vargas’ office for a Service Academy Night from 5:00PM – 8:00PM at the San Diego Community College District – Cesar E. Chavez Campus 1901 Main Street, San Diego, CA 92113.

Service academy representatives, ROTC representatives and service academy graduates will be on hand to help students learn about the application, nomination and appointment process.

When:
Friday, April 22, 5:00PM – 8:00PM

Where: San Diego Community College District – Cesar E. Chavez Campus
1901 Main Street, San Diego, CA 92113

No RSVP needed – this is an open event.  For questions, please call my office at (619) 280-5353.

Warm Regards,


Susan A. Davis
Member of Congress

Great News for Charter Schools!

From City Councilman Scott Sherman:

featurecd7_2Recently, the City Council approved my measure to reform the City of San Diego’s Conditional Use Permit (CUP) to ease permitting requirements on San Diego public charter schools.

Public charter schools serve over 21,000 students in 51 schools within the City of San Diego. Public charter schools have become an important educational option for thousands of San Diego parents. Unfortunately, the City’s burdensome CUP is enormously complex, time consuming, and expensive.

My plan achieved the following:

  • Revised municipal codes to reduce the permitting requirements to help charter schools obtain facilities
  • K-12 schools with less than 300 students will be permitted in residential multi-family, commercial regional, commercial office, and commercial community permitting zones
  • These revisions allow more money to go directly to education instead of navigating through the permitting process

We began working with public charter schools and affiliate organizations after being contacted by four charter schools in my district having trouble navigating the burdensome permitting process.

Thousands of San Diego working families depend on charter schools throughout San Diego to educate their children.

I applaud the City Council for approving this important measure. It will now be easier for charter schools to obtain quality facilities and allow for more funding to be directed to students instead of for consultants to navigate the complex bureaucratic process.

As always, if you see a problem in the community that needs to be fixed, please contact my office at 619-236-6677 or email ScottSherman@SanDiego.Gov and we will look into the issue right away.

JRThrasherContact

We are PROUD sponsors of this years Mobil Film Festival!

mffCome join as we celebrate the latest in filming techniques using your SMARTPHONE! The tips I have picked up have really upped my video making game for Real Estate!!

San Diego International Mobile Film Festival by S. Botello Productions™ International Mobil Film Festival™ was created for every human in the world to realize their dream of being a filmmaker. Using mobile phones and smartphones as a camera you can submit your mobile film free to watch your film screen on the big screen in San Diego, network with other filmmakers, join workshops and walk the red carpet during an awards ceremony.

Click here for more info: Mobil Film Festival

Flood Maps Revised for Portions of San Diego Co. Effective April 5th

flood sign

 

The Federal Emergency Management Agency (FEMA) has issued revised Flood Insurance Rate Maps (FIRMs) for portions of San Diego County, primarily in the vicinity of Escondido, San Diego and Imperial Beach. The maps will become effective on Tuesday, April 5, 2016. These maps show areas that are considered to be in a floodplain, and therefore may require homeowners to obtain flood insurance. Disclosure of a Special Flood Hazard Area (Zone “A” or “V”) that affects the property is a statutory requirement in real estate transactions under California Civil Code 1103.

FEMA last updated flood maps in most of the county in May 2012. On the maps that will be effective on April 5th, approximately 5 parcels have been added to the Special Flood Hazard Area (“100-yr flood zone”) and about 146 parcels have been removed from this high-risk zone.

Prospective home buyers may wish to check with their insurance agent to see if the property’s flood zone, and insurance requirements, will be affected by the map changes.

For more information about…

– the flood map changes and how they may affect your clients
– insurance requirements which these changes may trigger
– opportunities that may benefit your clients with lowered flood insurance costs
– disclosure compliance
– how to view the new FEMA maps online

…give us a call and we will make sure that you receive the information you need regarding the changes.

JRThrasherContact

The reverse mortgage has won some new respect.

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A decade ago, most financial advisers would roll their eyes at the mention of reverse mortgages, loans that give homeowners an advance on their home equity and allow them to delay repayment until the home is sold. Such products, these advisers used to say, weren’t for their clients, but rather for those who didn’t prepare financially for retirement.

New safeguards in recent years, however, have led many advisers and researchers to change their minds about reverse mortgages. Indeed, many now are exploring when and how to use them in financial plans. One important change, the Reverse Mortgage Stabilization Act of 2013, prevents homeowners in most cases from taking all their equity at once—roughly 40% of the total amount that can be borrowed is unavailable until a year after the initial loan. Other recently enacted regulations require homeowners to demonstrate they are able and willing to pay their property taxes and home insurance. And there are new protections for the non-borrowing spouse.

Recent policy changes “should make the product safer for seniors in the future,” says Stephanie Moulton, an associate professor at Ohio State University and co-author of a 2015 paper on reverse mortgages published in the Journal of Urban Economics. Prof. Moulton estimates that such changes as limiting how much equity borrowers can extract upfront could cut the default rate on reverse mortgages in half. (In 2014, nearly 12% of reverse-mortgage borrowers in the federally insured Home Equity Conversion Mortgage program were in default on their property taxes or homeowners insurance.)

“Over time, these changes may encourage larger banks to re-enter the market, further increasing the credibility of the product and potentially lowering costs,” Prof. Moulton says.

Of course, there are still risks, including spending the proceeds too quickly and suffering losses if the proceeds are invested, as pointed out in a 2015 paper written by Wade Pfau, a professor at the American College of Financial Services in Bryn Mawr, Pa., that favored the use of reverse mortgages in a retirement-income plan under the right circumstances.

While acknowledging the risks, Prof. Moulton says that “one of the advantages of the federally insured reverse mortgage, the HECM, is that the government assumes some of the risk for the borrower.” For example, she notes that HECM borrowers can never end up on the hook for negative equity. If the balance on the reverse mortgage ever grows to exceed the value of the home, the federal insurance covers the difference.

Here’s a look at some of the reverse-mortgage strategies financial planners suggest:

Foreclosure & Bank Owned homes in Chula Vista, CA

Taking a lump sum

Borrowing enough of the equity in a house in a lump sum to pay off an existing mortgage is one of the most frequent uses of a reverse mortgage, says Prof. Moulton. More than 60% of reverse-mortgage borrowers have used the proceeds for this purpose, according to her research. “This actually may be a pretty smart strategy,” she says.

Prof. Moulton cites a recent report by Harvard University’s Joint Center for Housing Studies that found that nearly 40% of seniors age 65 and older carry a mortgage today, a rate that has more than doubled since 1992. “Using a reverse mortgage to pay off a forward mortgage frees up monthly cash flow to a household,” she says. “Essentially it has the same effect on a household budget as receiving a monthly annuity payment.” But lump-sum borrowing can go wrong. Harold Evensky, chairman of Evensky & Katz/Foldes Financial, a wealth-management firm based in Lubbock, Texas, generally advises against using a lump sum as leverage to increase debt—as a down payment on a second home or vacation home, for instance. “There may be circumstances that justify the strategy, but it’s not something that should be considered without carefully considering the potential risk,” he says. “The risk is overleveraging,” he says—taking on more debt than you can afford to pay off.

And even if that isn’t the case—if the homeowner spends the borrowed money without incurring additional debt, say on a vacation or a car—spending the equity in a home this way deprives the homeowner of a valuable financial cushion, he says.

Foreclosure & Bank Owned homes in San Diego, CA

Opening a line of credit

Increasingly, advisers are suggesting that homeowners establish a line of credit through the HECM program whether they need the money immediately or not, because it can be used in several ways, as the need arises, to protect savings or even increase income in retirement.

A line of credit makes more sense than borrowing a lump sum and keeping it in reserve, says John Salter, an associate professor at Texas Tech University who has co-written papers with Mr. Evensky on reverse mortgages. That’s because, due to the intricacies of reverse-mortgage terms, the unused portion of a line of credit grows over the years, giving the homeowner access to more cash.

Shelley Giordano, chairwoman of the Funding Longevity Task Force, a Washington, D.C.-based industry group that promotes the use of home equity as a tool for retirement income, suggests setting up a reverse-mortgage line of credit as a way of protecting retirement funds from fluctuations in the financial markets.

Here’s the idea: In a bear market, homeowners can borrow funds as needed through the line of credit rather than withdrawing money from their investment portfolios. Withdrawals from a portfolio in down markets lock in losses and leave less money to grow when markets rebound. By borrowing instead, homeowners give the portfolio a better chance to recoup its losses when markets turn around.

Once the portfolio recovers, it can be used to pay off the line of credit, which is then fully available the next time cash is needed in a bear market. Ms. Giordano notes an HECM line of credit “cannot be canceled, frozen or reduced regardless of what the home value does in the future.”

An HECM line of credit also can be used as a source of income for those who want to delay applying for Social Security benefits and so increase their monthly payout when they do start taking benefits, Ms. Giordano says. After you apply for Social Security, you can stop taking money from the line of credit and, if you want, pay the loan back.

Because income from a reverse mortgage isn’t taxed, experts say an HECM line of credit can also be used—in place of taxable withdrawals from retirement accounts—to avoid tax-bracket creep, as well as the higher Medicare Part B and Part D premiums that can result from higher incomes. Ms. Giordano also suggests using a reverse-mortgage line of credit to pay taxes due on Roth IRA conversions. In the conversion process, distributions from IRAs are taxed as ordinary income, and experts often recommend paying those taxes with funds outside the IRA, because using money from the IRA for that purpose generates even more taxes.

Mr. Evensky says the usefulness of reverse mortgages belies the negative impression some people still have of them.

“I believe most criticisms relate to a myopic view of the product that has not been reviewed for decades,” he says. “Unquestionably there can be misuses of the product. But the problem is the use, not the product.”

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Article provided by Wall Street Journal

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