Friday, August 20, 2010
Market Reduction In Home Values May Allow For Lower Property Taxes
Florida property owners who have experienced a reduction in the value of their property due to the economy, damage from natural disasters, surrounding foreclosures in the neighborhood, or their home's general need for repair or improvement, may qualify for a reduction in property taxes. In addition, if it can be shown that similarly assessed homes in the neighborhood or subdivision are being charged lower property taxes, a reduction may be warranted.
Florida property taxes are based upon the value of the property as determined by the county property appraiser, and calculated by multiplying the taxable value of the property (the appraised value less any applicable exemptions, such as the homestead exemption) by the millage rate. The millage rate is the amount of tax charged per $1,000 of taxable property value. Each year in August, the county property appraiser distributes the Proposed Truth in Millage (TRIM) notice which notifies homeowners of the appraised value of their home and resulting taxes for that year. Homeowners who feel their property taxes are unreasonably high may petition the Value Adjustment Board within 25 days of receiving the notice in most counties. The property appraiser reviews petitions and approves those who qualify. For petitions unresolved by the property appraiser, the Value Adjustment Board will hire a special magistrate to conduct hearings regarding the property's value.
Homeowners who feel their taxes are too high should start by gathering information about their neighbors' assessed property values and taxes online at the county appraiser's website. It is wise to hire an independent property appraiser to assess the value of the home because the county appraiser typically estimates tax value based on the surrounding neighborhood whereas an independent appraiser can account for more discrete but important factors (such as economic downturn, natural disaster damage, sinkhole damage, surrounding foreclosures, Chinese drywall, or other similar factors). Pursuant to Florida Statutes, the property appraiser is required to consider several factors when estimating property value: 1) the present cash value; 2) the highest and best use of the property; 3) location of the property; 4) quantity or size of the property; 5) condition of the property; 6) the income generated by the property; and 7) the net proceeds from the sale of the property.
If an appraiser determines that property is assessed too high, or it can be shown that the property is comparable to other surrounding properties but taxed at a higher rate, then the property should qualify for a reduction in its taxable value. For any further questions, please contact Yesner & Boss, P.L. today for a free consultation.
Tuesday, August 17, 2010
Borrowers Cashing In, Instead of Cashing Out
During the housing bubble many homeowners borrowed against the inflated value of their property. The multi-year spike in property value allowed borrowers to obtain loans secured against their homes to free up cash, a process known as cash-out refinancing. When the bubble collapsed, homeowners across the country were left with decimated property value. The fallout was especially bad for those engaging in cash-out refinancing, as most were left upside-down, owing far more than the post-crash value.
In the wake of the housing bubble collapse, it seems some borrowers have learned their lesson, as a new trend known as cash-in refinancing has emerged in direct contrast to the cash-out refinancing. Cash-in refinancing refers to borrowers putting more money down when buying real estate or refinancing a mortgage in order to boost equity in the properties and drive down interest rates on loans. Having a high enough percentage of equity in property also allows homeowners to avoid having to pay private mortgage insurance, as well as avoid "Jumbo" mortgage status which can significantly increase the interest rate on payments.
The growing popularity in cash-in refinancing may also stem from the low yield of interest on traditional investments like certificates of deposits. Borrowers may actually be saving money by putting more equity into property to lower their monthly mortgage payments and interest rates as opposed to leaving the money in a bank.
Cash-in refinancing can be an especially useful strategy in Florida, where the homestead property exemption provides virtually absolute coverage against forced sale to meet creditor's demands. In Florida, a homestead can have unlimited value for personal residences up to 1/2 acre within a municipality, and up to 160 acres outside a municipality. Property taxes, mortgages, and mechanics liens for work performed on the property are the only creditors that can cause a forced sale of a homestead property. Having higher equity in a homestead property is valid asset protection option for Floridians. Contact Yesner & Boss, P.L.a to discuss your asset protection plan today.
Tuesday, August 3, 2010
Federal Trade Commission Places New Restrictions on Debt Settlement Companies
The Federal Trade Commission introduced new restrictions on debt reduction and debt settlement companies to curb fraudulent activity within the industry. The announced rules seek to deal with complaints from customers alleging they were charged large fees and never saw a reduction in the amount they owed to creditors.
The new regulations require companies to settle or reduce a customer's debt before they are able to charge a fee for the service, as well as provide a timetable and estimates for the total cost of service. Widespread consumer complaints about these types of companies caused the Federal Trade Commission to act. The story was common, depressed and vulnerable consumers in deep debt see an advertisement on television or the internet for debt forgiveness and settlement companies. They then give their last dollars in an earnest attempt to satisfy their debt, but are left with nothing to show for their effort.
"This rule will stop companies who offer consumers false promises of reducing credit card debts by half or more in exchange for large, upfront fees," said Jon Leibowitz, chairman of the F.T.C.
After the housing market collapse many of the now infamous same sub-prime mortgage lenders switched business plans and are the same people now offering distressed borrowers debt settlement programs. Since the housing bubble burst in 2007 the number of settlement companies and complaints of their abuse have grown exponentially.
Advocates for debt reduction services complain that the new F.T.C. regulations place an unfair burden on the companies by forcing them to collect fees only after the customers debt has been reduced or settled. Most credit card companies require the deposit of the full debt into an independent account before it will begin settlement negotiations, and without upfront fees many of these companies would be forced out of business.
The new F.T.C. regulations are lauded as a victory for consumers, but some consumer advocates are criticizing a loophole that would allow settlement companies to avoid compliance if their interaction with debtors is conducted entirely over the internet. The regulations are an amendment to an existing rule that governs telemarketers and thus only protects consumers who use their phone to communicate with the debt settlement companies.
The F.T.C. acknowledged the loophole but argued nearly 100% of the complaints against debt settlement companies involved telephone traffic.