PROPOSITION 8 — PROPERTY TAX RELIEF FOR HOMES THAT HAVE DROPPED IN VALUE
Proposition 8 –Property Tax Relief
California homeowners may or may not be aware of Proposition 8.
In 1978 California voters passed this constitutional amendment that allows a temporary reduction in the assessed value of their property when that property suffers a decline in current market value.
When, on January 1 of each year, the market value of a property falls below the assessed value, the assessor is obligated to review the property and enroll the lesser of the two values. If it is determined that the market value of the property at that time is less than the assessed value your property’s assessed value will be adjusted to the level of its current market value. This will result in a reduction of your property tax for that year.
To apply, contact your county assessor’s office. Some counties require the tax payer to complete a form requesting participation in the Proposition 8 outlined process, others will include you in the program based on information that you provide on the telephone.
Some counties have programs in place that review properties based on the purchase date. It is wise to contact them and ensure that your home is in the program. For more data go to:
http://www.boe.ca.gov/proptaxes/assessors/htm .
SCAM ALERT—NO FEE NECESSARY FOR THE VALUE REDUCTION
There is no reason to pay for a review that is required by law and will be performed FREE! Various private companies send mailings to property owners offering their services to pursue a reduction in the owner’s property taxes. These companies may charge hundreds of dollars to file for a reduction in value on behalf of the property owner. Some companies even impose late fees if the application is received after an arbitrary deadline. Homeowners do not need the services of a private firm to seek a property tax reduction. State law requires county assessors to review all requests for property value reduction for FREE! |
Note that the reduction is not permanent. Each year on January 1 participating properties will be reviewed until their values return to the former Proposition 13 values.
If you do not agree with the assessor’s findings you may file a formal appeal with the County Assessment Appeals Board or the County Board of Equalization. These boards are independent bodies established to resolve differences in property value opinions between the county assessor and property owners.
For more information go to:
http://www.boe.ca.gov/proptaxes/pdf/filingperiods.pdf
NATIONAL MORTGAGE DELINQUENCIES FOR THE 4th QUARTER OF 2009
The Mortgage Banker’s Association has released the National Mortgage Delinquency statistics for the forth quarter of 2009. As expected, the numbers continue to raise. The following chart prepared by the Distressed Property Institute reveals these statistics. They break them down by type of mortgage and status within the foreclosure process.
The first stage is when the loan is in default, meaning that the loan payment is more than 30 days late. The second stage is in Foreclosure, meaning that the bank has taken the property back and they now own the property.
The chart also shows the unemployment rate and the underemployment rate, both of which have a direct impact on the delinquencies now and in the future.
As a mamber of the CDPE organization, I agree that we want the public to be aware of the current market conditions. Feel free to call if you have any questions.
CONSUMER ALERT–REFINANCING CAN BE A MISTAKE!!
CONSUMER ALERT!!!
Homeowners should be aware of the fact that there can be a danger to refinancing your home if your existing loan is a “purchase money” loan.
Here is the deal. California is a non recourse state. That means that if a homeowner runs into financial difficulty and can not keep up with their mortgage payments, they are better off dealing with their lender(s) if the loan(s) are purchase money loans. A purchase money loan is one which was obtained strictly for the purchase of a property. If that home owner ends up in a short sale situation (trying to sell the property for less than they owe the bank) their chances of having the outstanding balance on their loan(s) forgiven is covered by California statute.
If, however, they end up in a short sale situation after they have refinanced their loans, the lending institutions have legal recourse to come after them for the unpaid balance of their loan. They can loose their home and still owe the bank thousands of dollars.
It would be a prudent move to check out the impact of a refinance if the probability of delinquency and/or a short 
sale in the future. Refinancing to lower loan payments may be a good move but everything has to be weighed carefully before making that move.
At this writing thousands of adjustable rate loans are about to adjust, increasing the loan payments significantly. Borrowers facing this reality should have all of the facts before they refinance.
The California Association of Realtors are vocally supporting SB 1178 to extend anti-deficiency protections to homeowners who have refinanced “purchase money” loans and are now facing foreclosure.
All of this is very confusing for most borrowers. Feel free to call and ask questions. If we do not have the answers we will point you in the direction of a reputable organization that can.
HAFA (Home Affordable Foreclosure Alternative) Program–Who Is Participating?
HAFA (Home Affordable Foreclosure Alternatives) Program. Part 6
Who is supporting The HAFA Program?
In earlier posts we have provided a lot of information about the new HAFA program. Detractors have said that if the program is voluntary it is not going to work. Only time will tell. However, many of the major players in the home loan business have already committed to support the program.
If your loan is being serviced by one of these major financial institutions you may find that the program is, in fact, 
having an impact on the short sale market.
The major players include:
Bank of America
CitiBank
GMAC Financial Services
Wachovia
Wells Fargo
If you are having trouble keeping up with your mortgage payments and have a legitimate financial hardship, the HAFA program just may help!
If your loan servicer is not one of the major players listed above, you can go the government web site, enter your servicer’s name and find out if they are or are not participating.
That link is: http://www.MakingHomeAffordable.gov/contact_servicer.html
Remember that at this writing, loans guaranteed by Fannie Mae and Freddie Mac do not fall into the HAFA program guidelines. That may soon change, or those institutions may adapt a similar program.
We can tell you from first hand experience that loan servicers are reacting much more quickly than they have in the past and they are asking distressed home owners to complete HAFA forms as part of the short sale process, even if the short sale started before the HAFA program was initiated. To date, all indications are positive for the HAFA program.
HOW DOES THE HAFA PROGRAM WORK?
How Does HAFA Work
HAFA was introduced to simplify and streamline the short sale process. HAFA accomplishes this by utilizing standardized forms and by setting forth strict timeframes that both the servicer and borrower must adhere to. The following is a 6-step summary of this streamlined process:
1. Servicers must consider HAMP eligible borrower for HAFA within 30 days of the date the borrower:
• Does not qualify for trial period plan
• Does not successfully complete trial period plan
• Is delinquent on HAMP modification by missing at least two consecutive payments
• Requests a short sale or Deed-in-Lieu
2. Servicer must proactively notify the borrower in writing of the availability of a short sale and deed-in-lieu
•Servicer allows borrower 14 days to contact them with interest in these options
•After this timeline servicer has no further obligation to extend the HAFA offer
3. Servicer issues Short Sale Agreement (SSA) along with Request for Approval of Short Sale (RASS) Document
• The servicer will send documents either proactively or at the request of the borrower
4. Once SSA is issued the borrower must sign and return SSA within 14 days of its effective date, along with real estate broker listing agreement and information regarding subordinate liens
• Borrower is allowed 120 calendar days from SSA effective date to obtain a contract
• Can be extended up to one year with servicer approval
5. Within three days following the receipt of an executed purchase offer, the borrower (or listing broker) must submit a completed RASS to the servicer
6. Servicers have 10 days to accept or deny a short sale request (RASS)
Source: Making Home Affordable. Supplemental Directive 09-09 Revised (2010):