Property taxes take a beating supporting early retiring government employees. Senior employees are good for government providing they can do the job. With much of the government unionized in an archaic form, it is difficult to terminate or sideline an employee. Unlike a construction unions, where, if the worker is undesirable, the contracting firm can fire that employee. If that union member has issues that make him or her undesirable, that person simply does not get hired.
Reforming government unions should be high on the list of taxpayer reforms. A new competitive union needs to rise similar to that of the United Brotherhood of Carpenters for government employees. Benefits would accrue to the workers and hiring and firing decisions would originate with the government employer. Employees would be terminated as workplace changes dictate without penalty to the employer. Those hired would be on an as needed basis. Tenure would be replace by an apprentice program.
It is either that or some entrepreneur needs to step up to the plate and fashion a skilled workers program (similar to Manpower or other outside contracting agencies) to outsource jobs for all the categories of government workers. Naturally a mega agency would be too ambitious a start, but basic services could be outsourced.
Pressure needs to be put on government unions to reform or be replaced. Government is getting too expensive. Cost cutting reforms without cutting service has simple solutions but entail lots of political wrangling.
If employees work longer it give local, state or federal governments the benefit for having to pay fewer years of retirement. Considering many retire after 20-years service at 70% pay, the financial drain on taxpayers is enormous.
Taxpayers could get almost double the bang for the same dollar by insisting local, state or federal employees reach 65 years of age or work 40-years before they are eligible for retirement. That would put them on par with the majority of working Americans. There is no reason to treat government employees as a privileged class.
“The world is a dangerous place to live – not because of the people who are evil but because of the people who don’t do anything about it.” – Albert Einstein, scientist
Apply a property tax guide to any home or property: Get the right values and plug in the figures for your house. Don't get stuck on the learning curve scratching you head what to do next. Eliminate mistakes in property taxes and property tax appeals.
“Mortgage borrowers continue to refinance their mortgages at a higher frequency than historically would have occurred given the rise in mortgage rates over this year,” said Frank Nothaft, Freddie Mac vice president and chief economist.
“But the wide proliferation of adjustable-rate mortgages (ARMs) originated in the past few years that are nearing their first interest-rate adjustment provides borrowers an incentive to refinance into a lower-cost ARM or fixed-rate mortgage. In addition, borrowers who might have considered a prime rate home equity loan for a home improvement or other need are turning to cash-out refinance options now that the prime rate is above 8 percent.
The Cash-Out Refinance Report also revealed that properties refinanced during the third quarter of 2006 experienced a median house-price appreciation of 33 percent during the time since the original loan was made, down from a revised 34 percent in second quarter 2006. For loans refinanced in the third quarter of 2006, the median age of the original loan was 3.4 years, about two months older than the median age of loans refinanced during the second quarter of 2006.
- http://originatortimes.com
Surprisingly, construction spending is up and Master Card purchases are on an increase. Reports show that the U.S. grew at a 3.9 percent pace in the third quarter. Even though home building activity is plunging, exports grew at the fastest rate in nearly 4 years. All this good economic news while inflation seems tame.
Oh yeah, did we mention the quarter percent rate cut? The Fed cut .25 basis point off the rate to make it 4.5%.
Nationwide, one in every 92 households is in foreclosure with Nevada having the highest foreclosure rate! According to RealtyTrac, more than 1.2 million foreclosure fillings were reported in the U.S. last year. Foreclosures could rise as some 1.5 trillion in adjustable-rage mortgage get repriced this year. Couple that with declining home prices and increase property taxes and one can be whistling some sour notes.
Home prices fell in 17 out of 20 cities in November compared with October 2006 data according to a recent MacroMarkets and Standard and Poors report. Although home prices in some cities did rise, nation wide there is no sign of the downtrend in real estate prices slowing down.
Property tax rates continue to skyrocket in many areas because of weak-kneed elected officials not reigning in expenses or living within town budgets. Many municipalities are soft on curbing excesses or cutting budgets. Rising property tax payments make many homeowners budgets too tight and they are not able to keep up.
Many banks have promoted hybrid and adjustable mortgage loans some with no and others with low down payments. With delinquent mortgage payments and foreclosures far above year-ago levels, indications are that hard financial times are gaining on many. Ballooning interest rates often surprise those who hold an adjustable-rate or sub-prime mortgage and when it is time to refinance, many are left with no option but foreclosure.
Some banks were, in some cases, even selling houses and forgiving debt. Do some of these banks feel some culpability for some creative loans they have saddled the homebuyer with? If they studied their customers' financial profile, they might never have made those loans. Do these banks fear scrutiny given the strong likelihood that their customers mortgage interest rate would be higher and unaffordable upon the refinance period? It's not unreasonable to expect mortgage rates to return to that double-digit territory as the economy cycles through a downturn.
A hybrid mortgage may be an appropriate choice if one plans to live in their house only for three or four more years. The first years of a hybrid loan are generally charged at a lower rate than traditional fixed-rate loans and if one plans to move and sell the home in a few years, it makes sense. If, for some reason, one don’t sell the home, they’re gambling using any form of a hybrid mortgage loan since it converts to an adjustable rate.
Hard times and rising payments make for tight budgets. If one wants predictability and the security of paying the same interest rate for the life of the loan, a fixed-rate mortgage is the smart choice. Rates are still low, by historical comparisons and given many economic forecasts of a weaker dollar and predictions for higher interest rates, locking in a fixed rate will reward one with peace of mind.
The monthly decline was the sharpest in 13 years showing continued weakness in the unsteady housing sector
According to the Commerce Department new single-family home sales fell to an annualized rate of 937,000 units from an upwardly revised rate of 1.123 million units in December of 2006.
In the Northeast, new home sales fell 18.7 percent while they decreased 8.1 percent in the Midwest and 9.7 percent in the South. The West saw the sharpest decline in new home sales with a 37.4 percent drop.
A Harvard study show a more upbeat view of the current housing market value correction than offered by most economists. All hinges on the course of employment growth and interest rates. The run up in housing demand over the years is buoyed by the huge increase of immigrants and their children and relatives. That trend should continue for the foreseeable future.
Both political parties are paper tigers when it comes to immigration reform. The situation is not like it was with most 2nd generation immigrants parents who had to go through strict Ellis Island immigration standards.
The number of foreclosed home returning to the market is having an effect on builders and investors. Home market values should continue a downward trend as the growing problem of affordability strengthens. The downward pressure on wages due to the large influx of immigrants is taking its toll. High housing cost and non-housing expenses leaves home ownership on a slippery slope.
