Big banks are making a lot of money off of delinquent property taxes -and already struggling homeowners facing foreclosure. And there lies the potential conflict -and potential reason, why many Floridians continue to point out they get the run-around when trying to find loan modification assistance from their lenders and mortgage servicing companies.
Is it fair for big banks to cash in on homeowners facing foreclosure? Families struggling to pay their taxes and their mortgage just wish the banks would help them, instead of finding new ways to cash in on their misery.
Many borrowers have reported they've been wrongfully advised to fall fall behind in mortgage payments -in order to "qualify" for their loan modification programs. Only to quickly learn interest and penalties are then tacked on -and credit scores take a dive -leaving them trapped with no place to turn. Soon they end up receiving a notice of foreclosure -instead of the loan modification they were looking for in the first place.
What happens when homeowners fall behind with their property taxes? The Consumer Warning Network -a watchdog organization based in Tampa, FL points out that Tax Collectors sell tax certificates to recover the delinquent property tax money owed by homeowners, which is used to run the local government.
Investors buy the certificates, which are essentially liens on the delinquent property. And history shows they make a great return.
An investor buys a certificate on a certain property, pays the taxes and in exchange earns interest on the delinquent amount the homeowner owes. That interest rate can be as high as 18% and is generally bid down by investors in an auction. It can go as low as 3%, but last year, averaged about 10%. That's a pretty hefty profit in these tough economic times.
In addition, part of what makes these certificates so attractive is that investors are guaranteed at least 5% in Florida, if the homeowner pays up in the first 3 months. So even if you bid your profit down to 3%, you can still make 5%. That's 2% in free money, guaranteed by Florida law.
Watch another great video
produced by the Consumer Warning Network ..
Is it fair for big banks to cash in on homeowners facing foreclosure? Families struggling to pay their taxes and their mortgage just wish the banks would help them, instead of finding new ways to cash in on their misery.
Many borrowers have reported they've been wrongfully advised to fall fall behind in mortgage payments -in order to "qualify" for their loan modification programs. Only to quickly learn interest and penalties are then tacked on -and credit scores take a dive -leaving them trapped with no place to turn. Soon they end up receiving a notice of foreclosure -instead of the loan modification they were looking for in the first place.
What happens when homeowners fall behind with their property taxes? The Consumer Warning Network -a watchdog organization based in Tampa, FL points out that Tax Collectors sell tax certificates to recover the delinquent property tax money owed by homeowners, which is used to run the local government.
Investors buy the certificates, which are essentially liens on the delinquent property. And history shows they make a great return.
An investor buys a certificate on a certain property, pays the taxes and in exchange earns interest on the delinquent amount the homeowner owes. That interest rate can be as high as 18% and is generally bid down by investors in an auction. It can go as low as 3%, but last year, averaged about 10%. That's a pretty hefty profit in these tough economic times.
In addition, part of what makes these certificates so attractive is that investors are guaranteed at least 5% in Florida, if the homeowner pays up in the first 3 months. So even if you bid your profit down to 3%, you can still make 5%. That's 2% in free money, guaranteed by Florida law.
Watch another great video
produced by the Consumer Warning Network ..
NEWSLETTER SIGN UP
SUBSCRIBE
CONTACT
Leave a comment