PajMon Information Blog

Posts Tagged ‘mortgage crisis’

When Proposition 13 passed in 1978, it really limited the capacity of local governments to use property taxes to construct public improvements and services. As a result, Californians were forced to discover different ways to finance public improvements in their communities such as roads, schools, parks, etc. The Mello-Roos Community Facilities Act of 1982 was enacted by the State legislature, the Act created Community Facilities Districts (CFD’s) to be put into place by local government agencies as a means of getting this crucial community funding.

Mellow-Roos Property Taxes changes for each Community Financial District. Generally, an adopted method that applies to the home size which is based on the square footage or parcel size is used to ascertain the quantity of specific assessment. So a smaller house in a community will pay less than a larger residence in the same community. Often, the special property tax and assessments do not exceed 1% to 1.5% of the market value of new homes. Additionally, the complete quantity of all annual property tax generally does not go above 2% to 2.5% of the house’s taxable property base value. When you lower your taxable base value or in other words, your property taxes you will save a substantial amount of money especially, if you have Mellow-Roos Taxes on your house since of the higher percentage in property taxes you pay.

The average taxpayer in most major city areas in California in todays real estate market has lost in excess of $200,000 in market value and at the normal rate of 1.25% in property taxes they will save $2,500 per year for every year they own their house! However, that same taxpayer at a 2% property tax rate based on of Mellow-Roos taxes will save $4,000 per year in property taxes! Learning to PERMANENTLY lower your taxable base value in California is the key to saving thousands over the course of your home ownership which is disclosed in the California Little Black Book.

Generally Mellow-Roos Property Taxes are applicable to recently built neighborhoods such as sizable Planned Unit Developments (PUD) where there have been numerous houses built in a short period of time and the taxes are needed to establish city services. Ive seen Planned Unit Developments that had upwards of 4,000 houses built! So, the county and city governments need to find funding to establish the roads, sewage systems, schools, recreation centers, parks and so much more. Prior to acquiring a home with Mellow-Roos property taxes you will be informed in the beginning negotiation stages of buying the home and during escrow that these property taxes apply. You won’t be blind sighted by Mellow-Roos Taxes, it is required that you are notified prior to buying.

About the Author: Valerie Faltas, Property Tax Expert has been involved in all facets of real estate for over ten years including assessments, appraisals, estates and trusts, investing and much more. She is a Certified Property Tax Appraiser, Licensed Residential Appraiser and a member of the International Association of Assessment Officers. As a real estate investor and adviser she is well versed in all aspects of real estate. To contact Valerie Faltas go to her website: www.propertytaxlittleblackbook.com.

There has never been more confusion about mortgages than at this particular time in history. The world economy has collapsed. Much of the world lays the blame for the collapse at the feet of greedy Americans. While this is patently unfair (who’s not happy to sell us crap?), it is true that three American parties do share the blame. The first two are those who bought homes they couldn’t afford and those who gave them mortgages. Of these, the most dangerous and most responsible party, the Federal Reserve Bank, is also the malefactor fingered the least.

The Federal Reserve increased the amount a bank could loan relative to the amount the bank holds in deposits. It is hard to argue that the increase to a 30-1 ratio was simple idiocy. Jon Stewart repeatedly hammered this point home when demolishing Mad Money host Jim Cramer on March 12th. Why is Republican Congressman Ron Paul the only politician in Washington pointing at the Federal Reserve Bank? Why are heads not rolling and careers ending at Treasury?. And they should pay. Congress must rescind the Bank’s charter and replace it with a central bank controlled by the Treasury Department.

Mortgage brokers tried selling a subprime mortgage to any prospect that had a pulse. With interest rates at historic lows (until now, and God help us), mortgages were made to people that mortgage brokers knew could not afford the payments if interest rates were to return to their historic averages.

These shaky mortgages were then bundled and sold to financial firms as ‘asset backed paper,’ the now infamous ‘toxic assets’ we, the taxpayer, are buying from the banks. Toxic assets don’t exist in the real world. In the real world they have a different name: liabilities. The government is effectively using your money to buy these liabilities named toxic assets.

What will happen going forward? People who can’t afford things will not buy them. And people who can afford something will save to buy it instead of putting it on the credit card. I know that’s harsh, but it is the truth. These people should never have been allowed to purchase a home, and they certainly shouldn’t be rescued from foreclosure.