This year several new mortgage rules went into effect to protect consumers and to reduce the risk of another housing recession. Each of the new rules is meant to address a perceived abusive practice by lenders toward borrowers. For the most part, there won’t be many changes for Bank of American Fork customers, but below we’ve highlighted differences you might see in obtaining a mortgage loan after the rule changes took place in January.
Some changes you may notice:
More-thorough application process. The Ability to Repay rule, mandatory for all mortgage lenders, is meant to address one of the purported causes of the financial crisis—borrowers entering into mortgage-loan contracts that they were unable to repay. Specifically, the rule mandates that lenders consider and verify the applicant’s ability to repay before making a mortgage loan. For example, lenders will ask about employment status, income or assets, loan repayment terms, debts, credit history, monthly debt-to-income (“DTI”) ratio, monthly payments associated with the property being purchased like taxes and insurance, and monthly payments on a simultaneous loan secured by the property being purchased. Although Bank of American Fork and many other banks already made mortgage loans responsibly, some lenders disregarded basic underwriting standards and made loans based on the expectation that the loan would be repaid when the property was refinanced or sold, rather than by regular principal payments made by the borrower over time. Lenders now have an extra incentive not to make loans with risky features, such as terms that exceed 30 years, interest-only payments, or negative-amortization payments (where the principal amount increases), and not to make “stated-income loans”, i.e., loans based on the income the borrower lists on the application but which has not been verified by the lender.
It will be harder to get loans with risky features such as balloon payments, terms exceeding 30 years, negative amortization, interest-only payments, and loans to borrowers whose DTI exceeds 43%. Again, most banks, including Bank of American Fork, already made mortgage loans responsibly, but because some lenders didn’t, the new rule gives lenders an extra incentive to avoid these risky features when making loans.
Your lender must provide you with a list of homeownership counseling agencies when you apply for a mortgage loan. Housing counselors throughout the country can provide advice on buying a home, renting, defaults, foreclosures, and credit issues. The counseling agencies on this list are approved by the U.S. Department of Housing and Urban Development and they can offer independent advice about whether a particular set of mortgage loan terms is a good fit based on your objectives and circumstances, often at little or no cost to you. This list will show you several approved agencies in your area. One of the new rules requires lenders to provide this list within three days of application. You can also find counselors yourself at http://www.consumerfinance.gov/find-a-housing-counselor.
You will receive an appraisal even if you do not request it. Lenders are now required to provide home-loan applicants with an appraisal of the subject property even if they do not request it. It must be provided within a certain time before closing, although that timing requirement can be waived by the borrower if the waiver is done early.
Some home purchases will require a second appraisal. When a seller sells a home after owning it for less than 180 days and for a price that is substantially higher than he or she paid for the home, and a lender finances the sale to a new buyer, if the new buyer’s APR exceeds a certain amount, a second appraisal must be obtained from a different appraiser. The new buyer won’t have to pay for the second appraisal—the lender has to pay for it—but it may delay the closing.
Bank of American Fork is committed to caring for its customers, and that includes keeping you apprised of changes in the banking industry that may affect you. To find specific information, talk to a mortgage loan officer today. Come back often for information and news!
People’s Utah Bancorp President and CEO Richard Beard has been named the chairman of the board for the Western Independent Bankers’ Association. His experience with and passion for community banking has positioned him to help WIB support community banks throughout the western United States.
Beard has been the president, CEO and a member of the board of directors of People’s Utah Bancorp and Bank of American Fork since 2004. He currently serves as a member of the board for the State of Utah Department of Financial Institutions and has also served on the board of directors of the Utah Bankers Association. Prior to his appointment as the chairman of WIB, Beard served on the board and executive committee.
WIB is a trade association that informs, educates and connects community banks with banking-related resources and services to achieve the highest standards of personal and organizational performance. More than 150 community banks in the western states are members. Besides educating bankers, WIB also educates communities on why the community-banking model should matter to local citizens.
Beard and WIB are passionate about the community banking model. Community banks are focused on the unique needs of local businesses and families. Loans are generally invested in the local economy and decisions impacting customers are made locally, by people who live and work in the communities they serve.
According to the Independent Community Bankers of America, community banks fund nearly 60 percent of loans to small businesses, although they compose just 10 percent of the nation’s banking assets. The high-touch, personal service they offer to individuals and communities can’t be matched by banks that make loan decisions a thousand miles away from the borrower’s community.
“When you look to your community banker for a mortgage loan or funding for local business, you can feel confident that they care about what they are offering the community,” Beard said. “Community bankers want to see people get into homes or get the loans they need to grow or start their businesses, and make loan decisions that ensure profits are reinvested in the local economy. We live and work in the community, too, so we have a vested interest in seeing the economy and individuals thrive.”
The number of banks in the United States is shrinking dramatically. In 1990 there were more than 12,000 banks in the country. Today there are less than 7,000, 98 percent of which are community banks. Some experts predict that soon there may only be 3,000-4,000 banks left after the last economic downturn and with continued consolidation subsequently occurring. WIB is concerned with the shrinking number of community banks, since fewer banks mean fewer choices for individuals and business owners.
Business owners benefit from working with local lenders who have unique knowledge about their communities—Senior Economist and Economic Advisor at the Federal Reserve Bank of Chicago Robert deYoung calls this “soft information,” and it comes from a relationship-based approach to lending.
Beard’s new position as chairman of WIB will allow him to continue to help preserve this critical community-banking model.
Bank of American Fork hosts shred day at branches in Draper, Lehi, Orem
Do you have a backlog of confidential documents that you want to get rid of? On May 3, 2014 Bank of American Fork customers and non-customers can bring their documents to the Draper, Lehi or Orem branches to be shredded by Cintas Document Management shredding services.
At Bank of American Fork, we care about your safety. One of the ways you can protect your identity is by properly destroying unneeded documents that have personal information on them, including documents that are out-of-date or documents you have saved electronically. Make sure you know the recommended amount of time to keep hard copies of important documents. You may be able to find the time period for keeping different types of documents with the respective organizations—for example, you might find the recommended amount of time to keep tax documents at www.irs.gov.
At Bank of American Fork’s shred day, customers may have up to five boxes of documents shredded (beyond five, we ask that you to wait in line again if other customers are waiting) and will be able to watch items being shredded by a camera on the side of the shred truck. Cintas can also provide free dated certifications of destruction.
Please note, the following can go into the shred truck: computer paper, colored paper, staples, paperclips, black binder clips, hanging file folders, magazines, phone books, spiral notebooks, two-part equi-fasteners, checks, brass fasteners, brochures and rubber bands. We will not be able to shred: cardboard, carbon paper, plastics, three-ring binders, microfiche or food wrappers. Small amounts of compact discs and cassettes are acceptable.
All paper shredded by Cintas will be recycled. For every ton of paper recycled, 17 trees, 380 gallons of oil, 6,993 gallons of water and 3.3 cubic yards of landfill space will be saved.
Remember to invite your friends and family to come on Saturday, May 3 from 9:00 a.m. to noon at Bank of American Fork’s Draper, Lehi and Orem branches. Find the addresses online at www.bankaf.com.
We know that convenient and safe banking is important to you, but we also know that convenient means something different for each of our customers. Maybe you’re the type of person that feels most comfortable bringing your cash in to a real, live teller for a deposit. Maybe you like to withdraw money when you’re out and about, but you don’t want to get the kids or puppy out of the car. When you have a question, maybe you want to make a call during your commute (on a safe, hands-free device, of course!). Or maybe you want to make your deposits through your smartphone, since you do much of your other business online.
We are here for you, in the places where you need us to be. We have 13 branches open on weekdays, with real people who care about you—some of you come in and wait for a specific teller because you know them and they know you. Find out the address and open hours of the location nearest you.
We have drive-through banking available at each location weekdays and from 8:30 a.m. to 1:00 p.m. Saturdays, because we know that’s when some of you need us.
Our customer service team will personally answer your phone calls from 7:15 a.m. to 6:15 p.m. Monday through Friday at 801-815-BANK. When you have a lost or stolen card outside those hours, you’ll still be able to reach recorded instructions on how to report it.
To conduct basic banking transactions from your phone through our 24/7 Tele-banking service, call our Utah Valley, Salt Lake Valley and toll-free lines, numbers found here.
You’ve probably heard that we offer online banking from your computer at www.bankaf.com. We also have mobile apps so you can bank from your smartphone or iPad®. Download our iPhone® app or iPad app from the iTunes Store® or App StoreSM and the Android™ app from the Android Market™. Customers can also visit the mobile site from an internet-enabled device at www.mobile.bankaf.com without installing a mobile app. Find out all of the things you can do in online and mobile banking here.
If you’re online and have a question or problem you need help with, you’re also welcome to use our “Live Chat” feature at www.bankaf.com, near the top right corner of the browser.
At Bank of American Fork, we want to provide you with safe financial services where and when you need them most!
iPhone, iPad and iTunes are registered trademarks of Apple Inc. App Store is a service mark and iTunes store is a registered service mark of Apple Inc. Android and Android Market are trademarks of Google Inc.
Bank of American Fork recently added online features that allow customers to apply online for a credit reserve account or a credit card* and submit their personalized images for credit and check cards.
The new online application for credit cards will provide quicker—instant, in some cases—approval for qualified credit card applicants. Customers can apply online for a VISA® Platinum Credit Card, VISA® Classic Credit Card or Credit Reserve. Visit www.bankaf.com and select “Products” and then “Bank Cards.” After selecting the product you want to apply for on the left side of the browser, select “Apply Online” to fill out your application.
“We’re excited to offer these online features that speed up the application process for customers who want to do more of their banking at home or on-the-go,” said Art Porter, manager of Bank of American Fork’s bankcard department. “It will also mean that our busy customers can apply for a card without ever having to drive to a branch or mail an application.”
Customers who have a credit card or check card with Bank of American Fork can now upload images for personalized cards on the bank’s website. Customers should go to www.bankaf.com, select “Products,” select “Bank Cards” and then select “Personalized Credit Cards” or “Personalized Check Cards” on the left side of the screen. Uploading an image to personalize your card is fast, easy and the first image per card is free.
For questions about credit cards and more information about how to apply call 800-815-BANK.
*Subject to credit approval.
Guest post by Jon Allen, Chief Compliance Officer, Bank of American Fork
This year we’ve been talking a lot about being fiscally fit—we’re always doing our best to help you be financially healthy by offering products that do have value and don’t have “gotchas,” and we’re also here to help you understand how you can use bank products healthfully.
One product that can be valuable to responsible consumers is Bounce Protection. However, used irresponsibly, Bounce Protection is a bad idea.
What does it mean to use Bounce Protection responsibly?
Like many of the things that help us stay physically fit, the key is moderation. Use Bounce Protection for emergencies or as a backup for the times you make a mistake in keeping track of how much money you have in your account—it happens to everyone sometime. You’ll avoid bouncing a check or having your card declined.
We recommend that you don’t use Bounce Protection for everyday purchases. For example, if you use Bounce Protection on a $3 bottle of water at the gas station because you just really want it now, even though you know you don’t have $3 in your account, you’re really paying $28 for that bottle of water (counting the $25 it costs to use Bounce Protection). It would be better to wait and buy that bottle of water once you have $3 in your account.
For frequent use, we recommend one of these less-expensive alternatives to Bounce Protection:
• Using your cash instead of borrowing
Bounce Protection is a great product for occasional, responsible use. We’ll keep creating and offering products that are healthy for you. We’ll keep trying to help you know how to use our products healthfully. When you use our healthy products in a healthy way, it will help you stay on track for a fiscally fit life.
If you have questions about Bounce Protection or any other products, call 800-815-BANK.
Bounce Protection is a registered trademark of Jack Henry & Associates, Inc.
Jon Allen (B.S. Brigham Young University, J.D. University of Idaho), is an attorney and a certified regulatory compliance manager and teaches a finance class as an adjunct at Utah Valley University. Before becoming Chief Compliance Officer at Bank of American Fork, he was a commercial and consumer loan officer at Capital Community Bank.
You have probably heard the news that 95 percent of U.S. ATMs run on Windows® XP and starting April 8, Microsoft will no longer offer tech support and security updates for this operating system. The good news for Bank of American Fork customers is that Microsoft tech support and security updates have never been our first line of defense for keeping your money safe at ATMs. Bank of American Fork ATMs and accounts have many layers of security to help keep hackers and fraudsters out.
Our ATMs are currently on the Windows XP operating system. We are aware of the tech support deadline and have been working on a solution for several months. Each of our ATMs will be upgraded to Windows 7 this spring—some before and some after the April 8 tech support cut-off. Microsoft will still offer tech support and updates for security threats to Windows 7, a newer operating system than Windows XP.
Besides the layers of security we have in place (that we won’t detail here, to help keep our ATMs and your money safe), we also receive alerts when there are hackers or skimmers and we run reports each day that show abnormal ATM transactions—all independent of the Microsoft security.
As a customer, you still might be concerned about your financial safety. Here are a few tips we can offer:
• You can lower your ATM limit, or the amount that can be withdrawn from your account, by calling customer service at 801-815-BANK.
• You can sign up for smsGuardian™, a text alert service that will alert you to transactions being conducted using your Bank of American Fork VISA® check card via alerts to your mobile phone. Once enrolled, you will receive a text message each time your check card is used for: international or out-of-state check card transactions, purchase authorizations greater than $200, five or more transactions within a 24-hour period or card purchases where the card is not present. You can enroll by visiting www.bankaf.com >Products >Personal >Bank cards. On that page you will find a link to sign up for smsGuardian alerts.
• Always protect your PIN—don’t give it out to anyone and make sure you cover the keypad when entering it at stores or ATMs.
If you are ever unsure about an ATM—whether it appears tampered with or it seems like someone is watching you when you do a transaction—don’t use it and call us at 801-815-BANK.
Microsoft and Windows are either registered trademarks or trademarks of Microsoft Corporation in the United States and/or other countries.
Guest post by Angie Morris, CPA, Hawkins Cloward and Simister
Charitable giving is an American tradition. We contribute to charity for a multitude of reasons. For example, to give back to society or to support a cause we feel strongly about. The Center on Philanthropy at Indiana University found 88 percent of households in the U.S. give to charity. While there are numerous charitable organizations serving a variety of beneficial programs, the enterprise you feel strongly about may not be represented. Do not let that deter you, as you can still support your cause by establishing a nonprofit organization. Here are the steps you should take to create a nonprofit organization.
If you decide you want to create a nonprofit, your first step is to work with an attorney to create a nonprofit corporation. The attorney will verify that the organization name is available, prepare and file the articles of incorporation with the state, compose bylaws or governing documents and pay the filing fees with the state. Once you receive your articles, you are eligible to apply for tax-exempt status with the Internal Revenue Service. Tax-exempt recognition from the IRS allows your organization to be exempt from paying income tax on the net earnings of your organization. Exempt status will also grant donors a deduction for their contribution to your organization.
Remember, to be tax exempt under section 501(c)(3) of the Internal Revenue Code, an organization must be operated exclusively for exempt purposes and the earnings cannot unfairly benefit an individual. The IRS considers exempt purposes to be providing for charitable, religious, educational, scientific, or literary purposes, testing for public safety, fostering national or international amateur sports competition and preventing cruelty to children or animals. As you can see, charitable organizations include a broad range of activities that help the public.
It is important to remember that nonprofit organizations are regulated by state and federal governments. The regulation is in place to protect donors from fraud, and ensure that the nonprofits are serving the public. The IRS has granted you tax-exempt status and they want to follow the work your organization is performing. You will need to file an information return with the IRS annually. If you fail to file a return for three consecutive years, you will lose your tax-exempt status. It is a lot of work to get exempt status, so remember to file. Fundraising requires registration with the states. You should start with the state you are organized in and then any other states where you solicit funds. Registration typically requires an application and a fee paid to the state. States observe organizations soliciting funds over the internet; therefore, if you use the internet for fundraising, make sure you check the state registration requirements to avoid penalties. Come back next month for another article about setting up donor accounts.
After you have established your tax-exempt status, there are several things you will want to do to run your organization properly. The organization should be operated like a business and show measurable results. You need to have as much money coming in as you do going out. Budgeting your incoming cash and upcoming expenses will help you stay on target, allowing you to fulfill your mission. Make sure you keep good records and review them regularly. There are many reporting requirements for nonprofits. A good set of records makes the reporting accurate and easier to complete.
To reiterate, the steps you should take to create a nonprofit organization are:
• Establish a nonprofit corporation and file with your state.
• Apply for tax-exempt status with the IRS.
• Know and follow regulations such as fundraising registration, IRS filings, etc.
• Operate your organization like a business, allowing you to further your cause.
If you believe your cause could benefit by creating a nonprofit organization, talk an attorney today!
Angela A. Morris graduated from Brigham Young University. She is a member of the AICPA and the UACPA. She has served as the treasurer of the Utah Association of CPAs and president of the UACPA Southern Chapter. She is currently the vice chair for the Housing Authority of Utah County, the treasurer of the Utah Valley Chamber of Commerce Women’s Business Network, and on the executive board for the Utah Valley Chamber of Commerce. Angie loves spending time at Lake Powell and is a devoted St. Louis Cardinals fan.
By Kristen Allen
Every New Year, the treadmills at the gym fill up with people determined to get physically fit. The goal of physical wellness is one we’re all familiar with, because each of us senses that we’ll be in a better position to reach all our goals in life if we maintain our physical health. But, of course, overall wellness extends beyond physical fitness. The individual who experiences general well-being has found an effective balance between physical, emotional, environmental, financial, intellectual, occupational, social and spiritual wellness.
As a financial institution, Bank of American Fork is in a unique position to influence the wellness of our customers, with specific regard to their financial health. We take that responsibility seriously, because we believe that when your finances are in order, the other elements of general wellness are more easily managed.
But making healthy choices in life can be challenging. Just as we aren’t always mindful of how our poor dietary choices are affecting the health of our bodies, we also tend to be only semi-conscious of the fact that our unhealthy financial diet can negatively affect our overall well-being. But the truth is that financial stress can cause our relationships to suffer, weaken our ability to cope productively with stress and decrease our productivity at work. With so much of our general wellness riding on it, it can be a profitable exercise to examine our personal financial health a bit more closely.
In today’s economy, however, it’s easy to become overwhelmed as we dig into the reality of our financial situation; it’s not surprising that money is the number-two cause of stress among adults in the U.S. (behind job-related stress), as well as the top predictor, by far, of divorce.
With that in mind, you may be wondering how to achieve fiscal fitness, especially in a climate where 76 percent of Americans admit to living paycheck-to-paycheck, and where the number-one financial concern among working adults in the U.S. is not having enough emergency savings for unexpected expenses. It can be difficult to know where to begin—sort of like setting a goal to run a marathon, after years of living the life of a couch potato.
Just like running 26.2 miles would require a plan of action and consistent training, creating a healthy fiscal plan and dedicating yourself to your financial goals will make all the difference.
Whether your financial concerns are about budgeting, debt reduction, retirement planning, saving for college, buying a home or simply creating a savings plan that makes sense for your life circumstance, fiscal fitness is not out of your reach, and it’s not too late to get started. You can achieve the financial health you need to manage your budget, investments, the monetary effects of significant life events and create a plan for life’s curveballs.
You can attain financial health, and it is our priority at Bank of American Fork to help you do it. Absolute integrity is one of our core values. That’s why every product we develop has your financial needs and health in mind, and is designed deliberately to avoid “gotchas” and traps. Also because what may be “healthy” and financially safe for one person may not necessarily be the best fit for someone else (just as dietary and fitness plans differ from person to person), we have a variety of healthy financial services and processes in place to ensure that we can meet the specific financial-health needs of each individual.
Whatever stands between you and financial wellness, let Bank of American Fork help. We know that whatever effort it might take to get your finances under control will be worth it to you and your family. If you have questions about your finances, or would like to understand how our products can help you create a healthy plan for your money, visit one of our 13 full-service branches or call us at 800-815-BANK. We are committed to providing you with safe financial services that will help you achieve your financial goals, and lead you to peak fiscal fitness.
The American Fork Police Department is raising money for two new police dogs. These highly-trained dogs help detect narcotics, locate suspects and missing persons, protect the community and guard the lives of officers. The police department has been raising funds since last fall to reach the needed amount of $30,000 for new dogs, training, and equipment. Bank of American Fork matched the first $11,000 donated by the community, and the police department now has approximately $23,900. Individual donations will now be crucial in raising the final $6,000. The police department has established an account here at Bank of American Fork where donations can be made. Contributors can also bring cash or checks to the American Fork police department.
Here is an awesome video from KSL news the other night of the dogs’ training, complete with bite suits: http://www.ksl.com/?sid=28779110.
The Daily Herald also covered the story, so read it here: http://www.heraldextra.com/news/local/k-retirement/article_baded9b8-52de-5e86-8db4-b1178d453faa.html.
The American Fork Police Department has used K-9 units for more than 15 years. For the last seven years, police service dogs Wolf and Duco, have worked side-by-side with Officers Russell Bishop and Ryan Archuleta to keep drugs off the streets, and deter and detect crime in neighborhoods.
At 63 (dog) years old, Duco and Wolf are beginning to suffer from arthritis and other age-related problems, and need to retire. Last fall, the department launched a campaign to raise the $30,000 needed to purchase, train and equip two new service dogs to carry on Duco and Wolf’s legacy.
“Wolf and Duco have been instrumental in protecting and serving the citizens of American Fork and Cedar Hills,” said American Fork Police Chief Lance Call. “Thanks to their efforts, officers have seized tens of thousands of dollars in drugs and paraphernalia, and have apprehended multiple suspects. The generosity of Bank of American Fork and many others will allow us to continue this very important work.”
“As the state’s leading community bank, strengthening the communities in which we operate is central to our mission,” said Richard Beard, president and CEO of Bank of American Fork. “It is an honor to be able to be part of a cause as worthy and meaningful as the K-9 program. Thanks to the efforts of the police department, local businesses and residents, we are close to our goal. As we enter the final stretch of this campaign, we call on those who haven’t yet had the opportunity to support this important program to pitch in, and close the gap. Together, we can all be part of making our community a safer place.”