Many homeowners have been taken by surprise when the value of their home suddenly seemed to hit freefall. It would certainly seem as though there should be one advantage to dropping home prices; however. Many homeowners assumed that when the value of their homes fell, their property taxes would as well. This has not been the case in many areas, however.
Homeowners have been suprised to realize that the property taxes have not decreased, they have increased! This has come as quite a shock to homeowners as they try to comprehend why they are paying increased taxes on houses that are not worth as much as they were a year ago.
For the most part, the reason is due to the complex manner in which property taxes are calculated in most areas. One of the biggest culprits, particularly in Nevada, is the fact that property tax increases were capped during the housing boom. The housing boom saw home values skyrocket rapidly. At this time, the values of home in these areas are decreasing, however the fall has not been enough to compensate for the increases of a few years ago. As a result, the values of home would need to decrease rapidly over a very short period of time in order for the tax bills to decrease. While declining property values have certainly been troublesome, they have not fallen enough to provide any sort of relief for home owners.
As the rate of defaulted loans and foreclosures continue to soar in many locations, numerous counties have discovered that the rate of unpaid properties taxes is also on the rise. The metro Detroit area, in particular, is experiencing a record high rate of unpaid property taxes. Detroit is currently considered to be one of the worst housing markets in the United States based on the decline of housing prices and increase of foreclosures. The lack of jobs and weak economy in the greater Detroit area are considered to be the primary factors contributing to the housing crash in the area.
Many property owners are still at risk of losing their homes to foreclosure if they fail to pay their property taxes three years in a row. This is spite of them meeting their montly mortgage payments! When this happens, the county takes control of the home and auctions it off to pay the balance of taxes due. Counties in the Detroit are struggling to recover millions of dollars in unpaid backtaxes. The issue has had a very large impact on counties in the greater Detroit area.
Property owners who find they are behind on the property taxes can take some steps to stave off foreclosure. The first step is to begin making payments on their taxes. Many homeowners make the mistake of thinking they are doomed if they cannot pay off all of the taxes owed and thus pay nothing at all. Keep in mind that making any payment, even if you cannot pay all of the taxes, is better than paying nothing at all. If you are not able to pay all of the taxes, at least try to pay off your oldest taxes first. Remember that taxes which remain unpaid for three years consecutively places you at risk for foreclosure. Pay off the oldest taxes first to combat this risk.
You should also check with your county to see if you are eligible for an extension on paying your overdue property taxes. In some situations, the county treasurer will grant exemptions or extensions for your taxes if you can demonstrate extremem hardship. It is best to do this as soon as possible, there are usually deadlines for exemption applications.
Also, check with your mortgage holder to find out if they offer a program or loan that may provide you with the cash to pay your taxes. It is rarely in the best interest of the mortgage holder to have the county take over a property, so they are often willing to work with the homeowner to avoid foreclosure. When you do this though, you will be taking on an increased debt burden.
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