Tuesday, July 10, 2012

Property Tax- What You Don't Read Can Hurt You

Simply amazing that some homeowners in this country don’t know that if you don’t pay your property tax, there will be a lien put on your property.

And the MSM is sounding the alram that ‘scropulas’ banks and local taxing authorities are attacking homeownership because….. ready for this…. They are misinformed when it comes to not paying the property tax.

An AP report here points the finger of blame at the local property taxing authority (and banks) for putting liens on homes that are deliquant with their property tax.

The elderly and other vulnerable homeowners are losing their homes because they owe as little as a few hundred dollars in back taxes, according to a report from a consumer group.

Outdated state laws allow big banks and other investors to reap windfall profits by buying the houses for a pittance and reselling them, the National Consumer Law Center said in a report being released Tuesday.

Local governments can seize and sell a home if the owner falls behind on property taxes and fees. The process helps governments make ends meet at a time when low property values and the weak economy are squeezing tax revenue.

States should update laws so speculators can't profit from misinformed homeowners and people who have difficulty managing their finances.

The rules for property tax sales can be confusing, especially to elderly people who can't keep track of their finances and people in minority-heavy communities that were targeted by subprime lenders.

Subprime lenders are less likely to bill borrowers for the property taxes and then pay the taxes directly to the government.

First off, lenders don’t bill borrowers. Most borrowers enter in to an agreement with the lender to (and in some case, required to) have an escrow account set up to pay the property taxes and insurance. By law, they are required to give the borrower the option of setting this up or paying it of their own accord. And each month a portion of your payment goes in to an escrow account, to pay the tax at the time the city submits the property tax bill.

AP continues- Instead, borrowers are expected to keep track of their taxes and pay them without help from the mortgage company.... People with higher-quality mortgages tend to pay taxes and insurance to their mortgage companies as part of their monthly bills.

Holy Cow. Tax liens have been around for decades. It clearly states this with any home purchaser on their closing paperwork that if the property tax is not paid, the taxing authority (local/county/state) can put a lien on the property and sell it. If people are misinformed, it’s their own fault for not reading what they sign.

1 comment:

FIREBIRD said...

Ignorance of the law is no excuse.... blame it on that union-protected school teacher who failed to teach you to READ!