When make an appraisal for a home mortgage the bias is for a higher appraised value. When engaging in a property tax appeal the bias is for finding a lower home value.
That, however, does not address the mass appraisal process that communities engage in. Mass appraisals are done cheaply. Often it is the lowest cost service that will hire college students to take the measurements and make observations. Past data is frequently rolled forward. The most expensive property on the block may be used as the point of reference. In equalities are abundant.
Consumer Reports (Nov.1992 v57 nil p.723) published that property tax records show an error rate of 40% exists in estimating property taxes.
The National Taxpayers Union ("How To Fight Property Taxes" 2004 p.1) writes that as many as 60% of all homeowners are over-assessed and not in line with their home value.
If your mortgage payment reflect a surge, it may be because your property taxes have increased. An excellent and inexpensive eBook that can guide you with the calculations you’ll need in the process can be found at http://www.housetaxax.com
According to the Appraisal Institute, problems with appraisal fraud could be addressed if lenders used only competent appraisers to begin with, and if mortgage broker and appraiser licensing standards were tightened.
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.
Forecasts imply that even if there is a housing recovery, home prices will raise very much. The national median existing home price is making an annual decline. Dampening demand, the national inventory of unsold homes now stands at 7.4 months. A year ago the supply was 4.5 months. Home sellers need to trim prices further as incentive to buyers. The prevailing buyers market is alarmingly close to making the statistic of the first time since the Great Depression that there was a annual national median home price decline.
Mortgage risks are compounding the problems. The Center of Responsible Lending said that 2.2 million subprime home loans have failed or will end in foreclosure. The report said that 19% of subprime mortgages originated in the past two years will end in foreclosure. That is almost one in five subprime loans.
Most loans are not subprime. The MBA (Mortgage Bankers Association in Washington DC) says that recent foreclosure data indicates a 1.05% foreclosure rate with a 3.86 percent jump for subprime loans.
Some agency is twisting the truth. Nevertheless, a home for most families is the greatest financial asset a family has and losing it has a huge impact.
Further housing weakness will be triggered by a credit crunch was predicted by UCLA Anderson Forecast in a recent Investment Business Daily article.
UCLA Anderson Forecast predicted growth to rise and a fed funds rate to 4.5% from 5.25% and they see at least two, if not three, Fed rate cuts keeping economic growth this year in positive territory. Lower mortgage rates are on the horizon.
With a 8 1/2 month backlog of housing inventory, a drop in mortgage interest rates would rev up a few engines. The National Association of Realtors said that pending home sales rose 0.7%, a gain that came despite bad weather and the impact from subprime mortgage problems.
American are a little less upbeat about economic prospects . Event the Economic Optimism Indes fell 2.2 points to 53.5 for the week. 50 is neutral, so we are still in the good news range.
In response to the increasingly slow housing market, mortgage companies are adjusting their businesses and layoffs are increasing.
Interestingly, according to the National Association of Realtors, existing-home sales, finishing the third-best year on record, are projected for 2006 at 6.47 million, a decline of 8.6 percent. In 2007, they’re expected to rise steadily from the current cyclical low and reach an annual total of 6.40 million, which would be 1.0 percent lower than this year’s total.
Also worth noting, Congress recently passed a new tax deduction that allows low- and moderate-income homebuyers to deduct mortgage insurance premiums from their federal taxes if they make less than $100,000.
The Student Loan Program works by participating banks in the Federal Family Education Loan Program guaranteeing a return that is 2.34 percentage points over the market rate on commercial paper to banks. It’s a sweet deal for banks.
Student loans are risky loans, but not for banks. When the student defaults, the government reimburses lenders for up to 98% of the principal and accrued interest.
New federal student loan originators totaled $69 billion in the 2005 – 2006 school year. First year projections for the US just to send a rocket to the moon in order to build a base are estimated to run over $104 billion. That expense is projected to increase with construction and re-supply shipments.
Enter alter reality
Privately built and financed, SpaceShipOne Wins $10 Million Ansari X Prize in Historic 2nd Trip to Space (The Ansari X Prize is a $10 million purse for the first privately built vehicle that could safely haul a pilot and the equivalent weight of two passengers to the edge of space — then repeat the feat within two weeks.)
SpaceShipOne technology is currently owned by a Paul Allen company called Mojave Aerospace Ventures (MAV). Allen is a Microsoft co-founder and for $20 million, bankrolled the design and building of SpaceShipOne.
Instead of wasting fuel to send up tons of metal into the stratosphere, they simply sent an airplane to the stratosphere, pulled a lever that tilted back the wings and lit the rocket fuse that propelled it into outer space; simple, energy efficient. That leaves NASA’s government bureaucracy bogged down with expensive antiques and primitive concepts funded by taxpayers paychecks.
Enter Sir Richard Branson and his Virgin Galactic Enterprise – SpaceshipOne. Virgin Galactic is the world’s first off-the-planet private airline. Business plan: 50 passengers a month for space flight, paying $190,000 each. Core product: a two-hour flight beyond Earth’s atmosphere, wrapped in a three- day astronaut experience. Time frame: 2009.
Private enterprise will insure commercial space flights that will let ordinary individuals go into outer space with resorts projected showing up in about 25 years. Lunar resorts? You bet, they'll be no vacancy rate until the next ship.
NASA could be disbanded and scarce money be spent on a free US education for anyone that wants it.
