Tag Archives: foreclosure

John C Dvorak shows Intelligence is no indication of Smarts. Property Tax Epic Fail

In the morning everyone.  So, did you see this tripe and dribble on John C Dvorak‘s twitter feed ( https://twitter.com/THErealDVORAK ) this weekend regarding taxation, wealth taxes, and property taxes?

Forget the arguments of a “wealth tax” in general for the moment, let’s focus on PROPERTY TAX as a wealth tax and being “implemented just fine.”

Property taxes are the WORST and MOST REGRESSIVE tax of any kind because THERE IS NO CORRELATION BETWEEN THE TAX AND THE ABILITY TO PAY!

With an income tax, the more one earns (i.e. more income) the more income tax is levied and paid which theoretically one could afford to pay.  With a sales or consumption tax, the more one buys or consumes the more the tax. If you can’t or don’t want to pay the tax, don’t buy the item (side note: we’ll discuss sales tax on food and its regressive nature on the poor in another post).

But with property taxes THERE IS NO CORRELATION BETWEEN THE TAX AND THE ABILITY TO PAY!

Just because some government hack declares that my property has increased in VALUE, it is therefore subject to more tax. This has no relationship on whether I can pay said tax.

For instance, a young newlywed couple buys a fixer upper in an up and coming neighborhood. Put lots of sweat equity into making a lovely remodeled home thereby increasing said home’s value. Maybe others see the same in the neighborhood and do likewise. Now said Revenuer says these homes have all doubled in value and therefore their property taxes have doubled. Can this newlywed couple pay double the amount of taxes? Did their income double?  DID THEY EVEN REALIZE ANY OF THE INCREASE OF VALUE OF THEIR HOME?  Hell No!  Just because their home increased in value they WILL NOT REALIZE ANY OF THE GAIN UNTIL THEY SELL! Of course at which time they will be taxed AGAIN on that increase, the same increase they have been taxed on every year through property taxes for the mere pleasure of owning a home.  But does the Revenuer even care? Hell No. Can’t pay the property taxes because said value has increased, “Well then just sell your house!” says the Government.

Not only are property taxes REGRESSIVE they are merely rent paid to the Government for the privilege of owning something.

Let’s take another example to see how destructive and regressive property taxes are.  Look at the “greatest generation”, they come back from the war, settle down and start a family. Maybe get a nice blue collar union job and put in their 30.  Along the way they buy a nice house in San Francisco¹ and scrimp and save to do so.  In the meantime they age, they have paid off the mortgage on the house, and now look forward to retirement.  But wait says the Revenuer, San Francisco is now valuable property, why look at all these techies flush from the Federal Reserve pumping cash into the stock market.  The Techies want to live in SF now and are driving up the prices and the boomer’s house is now taxed at double or triple the previous tax.  Again, does the Government care that the retirees on a fixed income can’t pay double or triple the tax?  Does the Government care that said retirees haven’t seen or pocketed one cent of the increase of VALUE? Hell no¹.

And that ladies and gentlemen is the sheer and utter fallacy of property taxes as a wealth tax  and being “implemented just fine.”

p.s. if Dvorak keeps this crap up, Curry will no longer be considered the Crackpot!

¹ Thank God for CA Prop13 which limited annual increases of assessed value  to an inflation factor, not to exceed 2% per year, but that doesn’t help the rest of the country so substitute the up and coming popular are in your state.

p.p.s And NO, Prop13 did not cause the current financial mess. The legislature willfully spent more than they took in to create that mess.

 

The foreclosure mess isn’t going away (it’s only going to get worse)

Zachary Roth over at The Lookout, a Yahoo News blog does a great job of summarizing why the foreclosure mess isn’t going away, in fact, I say it will only get worse.  Roth explains how the banks played fast and loose, if not outright violated the law, in foreclosing  on  homes.

And I particularly like sending a SWAT team to evict a little old lady.  What jackass judge signed off on that!  Just remember that the next time someone says that the actions of cops are reviewed and signed off by judges.

We’ve told you before about how big banks cut corners on paperwork over the last few years in order to speed struggling homeowners into foreclosure. And a “60 Minutes” report that aired last night offers fresh anecdotal reporting on just how irresponsible–and potentially fraudulent–the banks’ practices were. Meanwhile, compelling video of a grandmother being evicted from her home by a SWAT team last week suggests the banks aren’t slowing down their rush to foreclosure and eviction.

Banks profit by processing a vast number of homes into foreclosure as quickly as possible. But as “60 Minutes” details, many of the mortgages at issue were bundled and sold from one Wall Street investor to another during the housing boom, with scant attention paid among financial players to the actual underlying ownership documents. And as the foreclosures unwind in a slew of court proceedings nationwide, many banks have produced dubiously rendered legal documents that seek to shore up the ownership paperwork long after the original mortgage transactions were on the books. In some cases, financial institutions paid contract companies who employed an army of “robo-signers”—office workers who forged signatures on mortgage documents that were then used to initiate foreclosures.

READ THE REST………

And be sure to click through and watch the 60 Minuets piece. Oh, the bank VICE-PRESIDENTS in question, actually paid $10 an hour. Then again that’s probably all the real bank presidents are worth.

However, Roth does get thing wrong, and unfortuneatley it’s not minor!

All 50 state attorneys general are currently conducting an investigation into the foreclosure mess–including cases that involve forged documents like these. And Shelia Bair, head of the Federal Deposit Insurance Corporation, told CBS she thinks the banks should have to pay billions to set up a compensation fund for those who are being forced to accept foreclosure without proper documentation.

But if you thought all this might have chilled the banks’ zeal to push struggling borrowers from their homes, think again.

The 50 AGs are NOT looking out for you and I, they are trying to find a way to paper over and legitimize the actions of the bank.  More on that here.

The 27-page fluff-piece is now out where we can see it….

Let’s be blunt: There’s no “there” there.

The entire document is a rehash of what servicers had a legal mandate to do right up front.  Accurately apply payments.  Respond to inquiries.  Operate in good faith.  Use a NPV test for HAMP (was in the HAMP program originally.)  Document the assignment chain before foreclosing.

There’s exactly one substantive change, in that HAMP did not prohibit “dual-track” (that is, foreclosure while attempting modification.)

Essentially every other item in this 27 pages is something that Servicers already had a legal duty to do, either as a fiduciary to the investor or just through the ordinary covenant of operating in good faith (You know, the original standards that all businesses are held to that aren’t actually racketeering outfits and gangsters?  Yes, that.)

There’s no prosecution for all the bad affidavits, despite them being apparent acts of perjury.

READ THE REST………..

The New Ghost Towns of the West….

The 15 Metro Areas With The Highest Foreclosure Rates

Read more: http://www.businessinsider.com/the-15-metro-areas-with-the-highest-foreclosure-rates-2010-7#ixzz0vadWg8DL

Three-quarters of the big U.S. metro areas have increased their foreclosures activities in the first half of 2010, according to a study released today by RealtyTrac, an online marketplace of foreclosure properties. The company named unemployment as one of the key reasons for the increase.

The study ranks the top metro areas in terms of their foreclosure rates. Most of them are in Florida, California, Nevada and Arizona. See who made the top of the list this time.

Read more: http://www.businessinsider.com/the-15-metro-areas-with-the-highest-foreclosure-rates-2010-7#ixzz0vadqWWJ7