AND NOW THE TAX FORECLOSURES BEGIN!

Millions of dollars in late special property taxes are forcing some cities and districts to threaten delinquent taxpayers with foreclosure.

IS ANY COUNTY EXEMPT FROM THE HOUSING CRASH? GUESS NOT!

Apparently even San Francisco, the city on the hill (or the one with the hills, has a foreclosure problem and falling values.

See ABC News San Francisco

BOUGHT A HOME IN STOCKTON, MERCED OR VALLEJO-FAIRFIELD IN THE LAST FIVE YEARS? THERE IS A 90% CHANCE THAT YOU ARE UPSIDEDOWN ON YOUR MORTGAGE.

According to Bloomberg if you bought a home in Stockton, Merced or Vallejo-Fairfield area in the last five years, you have a 90% chance that you are upside-down on your mortgage. If you own a home in the Inland Empire (Riverside-San Bernardino), Bakersfield, Yuba City, El Centro and/or Madera, you have a 80% chance of being upside-down on your mortgage.

Then there is a warning about the future of property values and the impact of foreclosures contained in an article from the Fresno Bee. The warning points to the impact of interest only, teaser rate, liar loans originated from 2003 to 2006. Most of the loans made during this period were these easy-to-obtain loans. All of these loans will be resetting starting this year and through 2011. Virtually all of these borrowers are currently upside-down on their mortgages. How many of these borrowers will stick around to pay a mortgage payment that doubles on a home that they are upside-down on? The foreclosures throughout California have just started.

It is 11:00 p.m. where is your property tax assessment?

NEW MORTGAGE QUALIFICATION RULES PUT MORE PRESSURE ON HOME SALES AND FUEL FALLING PRICES

What goes up must come down. Once upon a time, mortgages were given to anyone who could state an income and sign his/her name on loan documents. Easy credit fueled quick sales and rising home prices.

Where are we now? The new stringent regulations from the banking industry are a knee-jerk reaction to years of almost no regulation. These new rules will make obtaining a home loan an almost impossible task for the average applicant. With this new difficulty, the number of qualified borrowers will be but a fraction of the number needed to stabilize the continued falling values.

All of this means... homeowners should understand this devaluation is a long-term problem not likely to change for many years to come. Get your property taxes lowered this year and plan on doing this for years to come.
See USA Today “Mortgage rules changes skewer some sales”

SACRAMENTO AREA HOMES LOSE 25% OF TOTAL EQUITY IN TWO YEARS!

Second only to the Modesto real estate market, Sacramento area homeowners lost 25% of their total equity in the last two years. In the last two years the percentage of equity slipped from 57% to just 28%.

Considering that a big percentage of first-time zero equity buyers were included in the number from two years ago, the story of erosion is even more dramatic.
See Sacramento Bee

DEPITE THE RECENT RAY OF HOPE, REAL HOME SALE FIGURES POINT TO A CONTINUED SLUMP. YOUR PROPERTY TAXES WILL HAVE TO BE APPEALED FOR YEARS TO COME.

Figures lie and liars figure. Each time a tiny ray of sunshine glimmers through the dark clouds of the current housing crisis, the media, the government, Wall Street, and a few economists proclaim sight of the end. Unfortunately, upon closer examination you might be tempted to say that what’s happened is the end of the beginning. See Who Doesn't Understand the Pending Home Sales Index?

All of this means that your home’s value is not likely to start increasing in the near future. To the contrary, conditions point to a continuing housing price slide. The future points to more foreclosures. As an example, the adjustable teaser rate liar loans with a programmed 5-year reset were being made through the first half of 2007. Even more important, during the last part of 2005 and all of 2006 when the housing market was showing the first signs of weakness, these loans were a vast majority of the loans being made. We have not seen a majority of the foreclosures from these loans that were originated in 2004 or the loans from 2005, 2006 and the first part of 2007. Foreclosures hitting the housing market do more than any other force in determining the values.

The point that needs to be examined is that the value of your home is not likely to increase during the next 3 to 4 years. To the contrary, your home value may continue to slide. All of which means, under the current system your property taxes will have to be appealed each year for years and years to come. Unless you like paying more than your fair share, I suggest you educate yourself on the appeal process.

NATIONAL TAXPAYERS UNION ESTIMATES ONLY 10% OF HOMEOWNERS NATIONWIDE PROTEST PROPERTY TAX ASSESSMENT.

A recent Yahoo article quoted the National Taxpayers Union estimate that just 10 percent of homeowners nationwide protest their property assessments.
In this same article, the assessor of L.A. County once again points out that their idea of helping the homeowner is to reassess a fraction of the eligible properties, reducing the assessments by less than half of the estimated property devaluations.
The big question, where is the outrage? As California homeowners are struggling to keep their homes amid falling property values and ever-increasing cost of living, it is nice to know that local governments are just as greedy as ever.

ARNOLD THE TERMINATOR BACKSLIDES ON NO NEW TAXES PLEDGE. IS THE COMMERCIAL PROPERTY TAX LOOP HOLE TO END? PROP 13 FOR HOMEOWNERS NEXT?

The Gov folded on his pledge regarding tax increases. Sales, income, commercial property taxes are now the target of the Gov and the Democrats to close the budget shortfall.

Many counties and cities facing shortfalls, due to cuts in funding from the state, will most likely call for the end to Prop 13.

This writer has on numerous occasions taken full advantage of the provisions of Prop 13. Is Prop 13 fair when one house sits side by side with another and has a wildly different tax bill? No.

It has been stated that democracy is one the worst forms of government, but it beats all the others. Prop 13 is not fair, but the arbitrary system that Prop 13 replaced was corrupt and unpredictable.

See San Francisco Chronicle

HOMEOWNERS, WHERE IS YOUR PROPERTY TAX ASSESSMENT? PROPERTY TAX APPEALS ARE BACKING UP AS THE TIME TO FILE FOR A REDUCTION GETS SHORTER

Los Angeles County property tax appeals hearings are backed up over a year, and appeals are building in almost every other county. Considering the obvious, that property values have dropped in some counties over 40%, why the back-up in the appeals process?
Is it because most homeowners would look at the long lines in the appellate process and decide to take the crumbs that the assessors throw their way?
Don’t be fooled by the assessors. Any reduction they offer is going to be a fraction of the tax relief to which you are entitled.
See Marin Independant

SAN DIEGO COUNTY ASSESSOR THROWS HOMEOWNERS A BONE OR WAS IT A FAKE THROW TO SEE THEIR HEAD MOVE!

How nice, the assessor of San Diego County gives an average of a 14% reduction to about half of the eligible homeowners.

The S&P/Case Shiller Composite Home Price Indices reports home prices in the San Diego region dropped 23.2% during the May 2007 to May 2008 period, There were approximately 145,000 homes that changed hands in San Diego County since July 2003. Considering there were substantial decreases property values before last year and number of potentially eligible homeowners is almost double than that announced by the assessor. Is this relief pretense?

It seems the assessor is working over time to make sure taxpayers are asleep between now and the end of San Diego County’s property tax appeal filing dead line which is September 15th. The only way any homeowner is going to get a fair assessment is to get comparables, check it against their assessment and file an appeal.
Did the assessor really throw the tax payers a bone or did he fake throw it to make their heads move?
See San Diego Union-Tribune
See Case-Shiller Composite Home Price Index

HAVE HOUSING PRICES FINALLY HIT BOTTOM? MAYBE, MOST LIKELY NOT.

Have home prices hit bottom? Many experts don’t see the end until at least 2012. Foreclosures will continue because of the liar loans (stated income) were being made up until the end of 2006 and the start of 2007. Almost all of these loans will reset to a high interest rate and monthly payment at the end of five years from origination. Most of these “homeowners” will be bailing through the walk-away foreclosure process when the payments reset to the higher amounts.

As the foreclosures continue housing prices will continue to drop. As property values continue to slide the assessors and county governments will under pressure to avoid reducing property taxes to correct assessments.

One little thought of provision of the Prop 13 is that any property tax reduction for loss of value is temporary. In other words, any reduction of property taxes by appeal that you receive through the assessor’s office or tax appeals board only applies to the current year. Property taxes reductions are not carried over and have to be applied for again each year.

Since property values will most likely continue to slide for the next 3 to 4 years and not likely to get back to the 2006 level for the next six to ten years maybe you should educated on the property tax appeals procedure or buy the guide.
See LA Times

CITIES DREAD STATE’S CUTS WILL LOOK TO LOCAL TAXPAYERS TO MAKE UP DIFFERENCE---NEW LOCAL FEES (TAXES) ON THE WAY!!!

The state’s solution to close the budget shortfall will most likely be the ax to come down on the revenues going to the cities and counties. Since Prop 13 prohibits any increases in the base property tax rates without the super majority of the voters, a new variety of fees for services and penalties is being planned.
Most homeowners, when faced with less income, cut back on their spending. Some only do so after they have exhausted their savings and/or available credit. During the boom when property was rapidly turning over with expediential growth in housing prices and new assessment, these sub-divisions of the state apparently believed that the boom would be endless. Many cities and counties anticipated a 15% growth in revenues, even when the boom could easily be determined to be over.

The question begs to be asked. How could these cities and counties not see the housing down turn and state budget crisis on the horizon? I guess being a city planner doesn’t mean looking at the obvious.
See San Bernardino Sun

DESPITE 25% DROP IN HOME VALUES STATE WIDE, MANY COUNTIES GET AN INCREASE IN PROPERTY TAX REVENUES! HOW? WHY?

Back in 1978 housing prices were going through the roof and property taxes were based upon the local assessor’s whim. Property taxes were rising 6% per year in this county, 10% in another, and so on. Homeowners were being taxed out of their home with these ever-increasing and unpredictable property taxes. The tax payers revolted and passed Prop 13 which placed a limit on increasing property taxes to 2% per year.

Fast forward to the biggest drop in property values since the great depression... One would think that property tax revenues would be down in proportion to the devaluation of property. Not so. Assessors are taking full advantage of the 2% increase provision of Prop 13 and sticking it to the California homeowner.

The provision of Prop 13 limiting the increase to 2% was not intended by the voters at the time to give the counties a wind-fall when housing prices are crashing. The intent was to temper the property tax increases during the boom cycles. Is it time for another property taxpayer-led revolt? Maybe. If not that, it is time to contact the California legislators and demand that they require the county assessors quit abusing the spirit of Prop 13 and stop the increases until the crash at least stops.

The voters approved Prop 13 in great numbers 30 years ago to create stability in property taxes - not give the counties extra revenue when the housing market is crashing. Looking at the budget mess in Sacramento, maybe it is pitchfork time again. It is time to storm the Bastille! See L.A.Times.

COUNTY ASSESSOR’S OFFICES HIT WITH TIDAL WAVE OF PROPERTY TAX APPEALS

From San Diego to Redding, from Crescent City to El Centro, county assessors are hoping that tax property payers are sleeping past the appeal filing dates. If they wake up, there could be big problems, and it's not just the lost revenues.

As an example, as of May 2008, the Los Angeles County Assessor’s office has a one year plus backup on hearing property tax appeals. Their effort to discourage appeals consists of announcing that 128,000 homeowners will receive reductions averaging $750per home due to property devaluations. Only problem is that the average home value in L.A. County dropped about 25% in the last tax year with an average loss over $150,000 per home. At the standard 1.25% average tax rate on assessed value the reduction should have been $1875 per home not $750. That’s a big difference. (See L.A. Times)

Every county assessor in California is looking at a potential roll back to 2004 or 2003 property values. This means the assessors are responsible for reassessing the property taxes on over 1,700,000 California homes. This task would require an additional work force of tens of thousands of additional employees to complete this task within the time limits. Their easy solution, throw the taxpayers a few crumbs and hope they don’t appeal.