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Under the auspices of the Consumer Financial Protection Bureau (CFPB), which sprung from the Dodd-Frank financial reforms, the US Treasury is readying its rules for what is referred to as a Qualified Residential Mortgage (QRM). While the rules are not yet final the advance information indicates there are at least a few things that are of particular interest to anyone hoping to purchase a home with a new loan or refinance an existing one. Boomers in particular will likely be impacted by a number of the proposed restrictions having to do with debt ratios, acceptable methods of documenting income and downpayment/equity. The changes have the potential to put the recovering housing market right back on its ear if they are all enacted as proposed as a large number of potential home buyers will no longer be able to qualify at the level they can today. While the new rules will not fully go into effect until January, 2014 you can bet that lenders will begin to layer the changes into their requirements as soon as they are convinced of the final regulations.

Because almost every loan (save for those made by “private” lenders) will need to conform to the new guidelines, the argument can be made that once again, the rules will serve to protect lenders from themselves while negatively impacting access to home mortgages. Consider that the proposal suggests that no loan can be considered where the overall debt ratio of the borrower exceeds 43% of their calculated gross monthly income – regardless of equity or liquid assets. While the argument can be made that 43% might be an appropriate number for most families, consider that conventional loans are currently approvable with debt ratios as high as 50% and we have seen recent FHA approvals as high as 57% if the loans are approved through a rules based, automated underwriting system. The impact in high-cost housing areas will be staggering when you consider that a 14% reduction in the maximum debt ratio effectively eliminates over 25% of the pool of eligible borrowers that heretofore would have qualified for the financing to purchase a particular home.

Consider, also, that many retired folks live off a combination of social security, income from retirement accounts and savings. To the extent that a borrower uses savings that are in non-retirement accounts to supplement social security, the withdrawal of those funds is not considered income and thus, cannot be considered in calculating the 43% maximum debt ratio under the CFPB rules as currently enacted. From the perspective of a borrower that is interested in mitigating tax liability and is able to draw upon non-taxable savings in deference to taxable withdrawals from IRA or 401K accounts the consequences can be staggering. We have already seen this manifest itself with borrowers that were fully able to purchase their retirement home and qualify for their loan of choice before the previous changes that came to the market in 2010 regarding the prescribed method for income documentation. Now, many of those existing homeowners can no longer qualify to refinance their current mortgages because the use of non-taxable savings for daily living expenses is no longer considered when calculating debt ratios and incomes (regardless of the balances in those accounts or the fact that they have been making the payments previously as agreed) – only funds withdrawn from taxable accounts can be counted. Layering into that reality those newly recommended debt ratios are set to be crunched down to a level that requires more and more income to qualify which can only mean higher and higher tax bills for the borrowers as they rearrange their finances to make themselves more credit-worthy in the eyes of the CFPB. The only alternative is to live with their current financing, which many times is at nearly twice the current interest rates or retire the debt with liquid assets, if available, which very well may trigger a whole new set of tax consequences.

I’ll do my best to try to keep you informed as the rules wind their way through the various governmental agencies. If you own a home and it’s not “free and clear” this is important stuff to understand.


Beethoven’s Moonlight Sonata is playing on the “Light Classical” channel on Time Warner Cable’s Music Choice.  The song is so beautiful it’s distracting me from the task at hand which is to get this damn blog under way.  I secured the URL a couple of years ago and put it in the inventory – it’s taken  me that long to figure out what I want to write about.

The truth is, I’ve known what I want to write about but I’ve let too many opinions cloud my thinking:  “Limit the blog to 1 or 2 subjects“: “Make sure you have something to market – and sell, sell, sell!”; “Find out what folks are interested in and then tailor your articles to those interests”. Blah, Blah, Blah.

Bottom Line:  Today’s an anniversary of sorts.  Two years ago this very morning I had my neck and tongue fileted by Dr. Paul Kim at Loma Linda University Hospital.  1/3 of my tongue and 30+ lymph nodes from my neck and shoulder went missing; all in the name of curing tongue cancer.  Dr. Kim is obviously so good at what he does that I sit here today able to eat (too well) and speak as if nothing ever happened in spite of the pre-warnings from well-meaning friends, acquaintances and health care professionals about what might very well have been.  Save for an 8 inch scar that traverses my neck like a badly drawn trail map that I like to call my “tattoo”, tasting or chewing anything on the right side of my mouth, whiCSL12411 (2)stling or sticking out my tongue, everything is back to normal; whatever that is.

Turning 60 this year gives me an absolute right to the name of this blog.  And, since I apparently haven’t totally thought this thing through in the past couple of years while continually mulling it over in my mind it may turn out that other Boomers will have an opportunity to write about their experiences here – I haven’t decided, yet.  If you have an idea that you’d like to share let me know and I’ll give it some appropriate consideration.  That’s the beauty of it:  For a few bucks a year this is all mine and I can do whatever I want.

So, what will I write about?

I know way too much about cancer; something I never wanted to study, believe me.   In 1998 at the tender age of 45 I was diagnosed with lymphoma after 6 months of not understanding why I felt like dog poop and had continually tried in vain to cough up my lungs.  My son, Geoffrey, died in 2010 at the age of 26 from the very same disease – absolutely devastating.  No other genetic link in our family that we can find.  Two of my best friends succumbed to the big “c” last year.  Other non-blood relatives and friends are currently fighting the fight.  I’m a Team Captain and Event co-chair for the American Cancer Society’s Relay For Life because it was the only way I could figure out how to fight back.  Layer all of that together and you’ll come to understand why I will write about cancer.  It has or will affect all of us in some profound way. There is no escape.  It’s important stuff to know about and try to understand.  It was a blog about the death of my son that unleashed the writing beast in me.

A paying writing “gig” tells me at least somebody likes reading the things I write.  I’ll bring some of that to these pages.  TripBucket is a website that is dedicated to helping its registered users complete their bucket lists.  They hired me to provide content because I can occasionally write a complete sentence, I suppose.  TripBucket also motivated me to start designing my own bucket list which is now bigger than I can possibly complete even if I live to be 100.  Not likely, given my history.  You’ll gain some exposure to TripBucket here as well.  The next item awaiting check-off on my list is a 40 kilometer (sounds more impressive than 25 miles, doesn’t it?) bike ride that I hope to complete in the next few weeks within the Tour de Palm Springs.  I’ll tell you how that goes.

I am a licensed Real Estate Broker and Mortgage Broker in the State of California.  I’ve held a broker’s license since 1986; a salesperson’s license before that.  I own a real estate business (with a partner) and I suspect you’ll read a fair bit about the state of real estate and business in general if you decide to follow this blog.

We have a really big family:  GIMG_0800randchild #6 is on the way before June 1.  6 children between my wife and me that have made everything from Public Safety (courtesy of the LAPD) to the art world their vocation.  6 brothers and sisters, lots of in-laws, myriad nieces and nephews, 2 ex-wives, my mom in the Texas Hill Country and my incredibly supportive wife of nearly 18 years – all of whom provide fodder for life’s lessons.

I like to cook.  I once took a class at the Santa Fe School of Cooking, ate the product and lived to tell.  I figure that gives me all the permission I need to share recipes and methodology for some pretty great meals.  I typically forsake the kitchen for the barbecue – I hate calling it the “grill” because it can do so much more.  And, I don’t particularly like to measure but I’ll do my best in communicating the formulas. I think men, in general, struggle for a creative outlet and cooking can so easily fulfill that need.

So here’s the deal.  I’ll write about what I want.  You let me know when you think I’m full of crap or you agree with what I’ve said and if there is something you want me to investigate and report back I will do my best, as long as the subject is interesting to me, too.

Did you know that Beethoven wrote the Moonlight Sonata for his student, an Austrian Countess with whom he was desperately infatuated?  Two years passed before he was able to come to grips with his inability to marry the love of his life due to his station in society and move on.  Hardly anyone knows her name.

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