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Thursday, August 4, 2011

Pembroke Pines gives tentative approval to slight cut in property tax rate

The City Commission gave tentative approval to a slight property tax rate decrease Wednesday night.
The proposal could lower property taxes by 1 percent. Residents now pay $56.88 per $10,000 of property value. Under the lower rate, they would pay about $56.37 per $10,000.

An average Pembroke Pines home with a value of $180,300 with the $50,000 homestead exemption would incur $734.50 in taxes next year, down about $6.60 from this year.

City staff showed commissioners a preliminary breakdown of next year's $302 million spending plan Wednesday night.

Spending would increase in the general fund, in which the city faces a $2.2 million deficit, by about $2 million, but only because of inflation, said Assistant City Manager Aner Gonzalez.

No major cuts have been identified. Instead the city would focus on reducing costs a little across the board, Gonzalez said.

The financial outlook is the brightest it's been in a few years, he said.

Property values went up just half a percent, much improved over last year's 11.4 percent decrease.

www.PTAGflorida.com

Florida home prices fall in June, but it could be worse

Florida home prices continue to decline – no surprise there. But the drop in June doesn’t look so awful compared with other states that also endured the worst of the housing bust.

Prices in the Sunshine State fell 7.6 percent in June from a year ago, according to the CoreLogic Home Price Index released Wednesday. But 10 other states had bigger declines, including Nevada (12.4 percent) and Arizona (12.3).

Prices in Broward County fell by 7.4 percent in June and May, according to the CoreLogic index. Palm Beach County prices dropped by 11.8 percent in June and 10.7 percent in May.

Nationally, prices rose 0.7 percent in June, the third straight month-over-month increase.

“While there is a consistent and sustained seasonal improvement in prices over the last three months, prices are lower than a year ago due to the decline in prices after the expiration of the tax credit last year,” Mark Fleming, CoreLogic’s chief economist, said in a statement.

Various state and national groups report on home prices, but it's important to note that the methodologies and time frames often are different.

CoreLogic is a California research firm. Its index, like the Standard & Poor’s/Case-Shiller Home Price Index, measures increases and decreases in prices of the same homes over time. But the Case-Shiller data trail CoreLogic’s by a month.

Meanwhile, the Florida Realtors trade group releases a median price for homes sold in a month -- a different measure than either of the indexes.

www.PTAGflorida.com



sun-sentinel.com

South Florida No. 2 on mortgage fraud risk list

South Florida's mortgage fraud risk index spiked 10 percent during the first part of the year, shooting the region to second place nationally for potential housing scams.

It ranked 20th during the same time last year.

The region, comprising Palm Beach, Broward and Miami-Dade counties, was the only high-risk area to see an overall increase, according to a report released this month by fraud analysis company Interthinx.
Top-ranked Modesto, Calif., experienced a 23 percent decrease in the first quarter compared with the same time in 2010.

The quarterly Mortgage Fraud Risk Report tracks indicators of fraud on mortgage applications run through an Interthinx detection program available to lenders.
Nationwide, the index posted four consecutive quarters of decline until it jumped 25 percent during the first quarter of 2011.

"Risk is becoming more prevalent across the board," said Kevin Coop, president of Interthinx, which recommends that lenders continue strict screening processes before making home loans.
And despite an assumption that fraud occurs only during a market boom, analysts said plenty of scams happen on the downside.

"Fraud ebbs and flows," said Ann Fulmer, vice president of business relations for Interthinx. "Whatever schemes are out there are always mutating to take advantage of the local economy and the weaknesses in lender processes."

While the report ranks fraud on an overall basis, it also measures four types of scams: property valuation fraud, identity theft, occupancy fraud and phony income reports.
South Florida ranked in the top five for all types of fraud except income-based scams.
The area ranked first in occupancy fraud, which is perpetrated mostly by investors or second-home buyers who falsely claim they are going to live in the house full time as a way to reduce down payments and interest rates.

The region ranked fourth for identity fraud and fifth in property valuation fraud. Identity fraud typically involves schemes to hide the real buyer of a home to get a better credit profile and meet lender guidelines.

South Florida was the only top-five region to see an increase - 2 percent - in valuation fraud, which includes manipulating property values to create a profit margin. Flipping, in which an investor buys a property cheap or at market value and sells at an artificially inflated price, was part of what led to the real estate crash.
Although flipping decreased after 2008, Fulmer said it is on the rise again.

"Real estate is local, everything responds to local markets, and there are places like South Florida that are vulnerable to certain risk categories," Fulmer said.

One reason for that susceptibility is the variety of South Florida buyers, including investors, retirees, second-home buyers and foreigners.

"People not familiar with the area rely on professionals for help, but con artists trade on the appearance of being upstanding individuals," Fulmer said.

 Property Tax Appeal Help: www.PTAGflorida.com

Wednesday, August 3, 2011

Cutler Bay may raise tax rate to buy land for school

Cutler Bay is advertising a higher tax rate for the coming budget year, but the increase will only be needed if the Town Council decides to buy land for a school.

 

Cutler Bay homeowners could pay more in property tax if the Town Council moves forward with plans to buy land for a charter school.

The town will advertise a maximum tax rate of $2.8031 for every $1,000 of taxable home value, up from this year’s rate of $2.5888.

But Town Manager Steven Alexander said the higher rate will be needed only if the council decides to buy land for the proposed school. Otherwise, he will recommend keeping the tax rate unchanged.

Based on the higher rate, the longtime owner of a home assessed at $130,000 would pay about $230 in tax to the village, up about $23 from the preceding year. That assumes the owner qualifies for the standard $50,000 homestead exemption and that the house’s taxable value increased 1.5 percent from the previous year, the maximum amount allowed under the Save Our Homes amendment to the state Constitution.
People who haven’t owned their homes as long may see a tax cut if their home’s assessed value continues to drop. Such changes in the market typically don’t help longtime homeowners because Save Our Homes already has kept their taxable values well below market prices.

Although plans for growth are underway, including the opening of Lakes by the Bay Park, Alexander expects only a small budget gap.

Though the town’s tax base remained about the same, at $1.7 billion in the past year, according to the Miami-Dade property appraiser’s office, Alexander said the council would not have to cut services or town jobs to cover a budget shortfall.

“Over the years we’ve been able to amass a significant amount of savings,” Alexander said. “We can use it to supplement a budget gap in a responsible way that still allows some savings.”
According to Alexander, Cutler Bay has a total of about $12 million in savings.

For Property Tax appeal help: www.PTAGflorida.com

Tuesday, August 2, 2011

Bulldoze: The New Way to Foreclose

Banks have a new remedy for America's ailing housing market: bulldozers.

There are nearly 1.7 million homes in the U.S. in some state of foreclosure. Banks already own some of these homes and will soon repossess many more. Many housing economists worry that a near constant stream of home sales from banks could keep housing prices down for years to come. But what if some of those homes never hit the market?

Increasingly, it appears that banks are turning to demolition teams instead of realtors to rid themselves of their least-valuable repossessed homes. Last month, Bank of America announced plans to demolish 100 foreclosed homes in the Cleveland area. The land will then be donated to local government authorities. BofA says the donations in Cleveland are part of a larger plan to rid itself of its least-salable properties, many of which, according to a company spokesperson, are worth less than $10,000. BofA has already donated 100 homes in Detroit and 150 in Chicago, and may add as many as nine more cities by the end of the year.

And BofA is not alone. A number of banks are ramping up their efforts to not just rid themselves of their unwanted homes but also fully dispose of them. Fannie Mae has a program to sell houses to local municipalities for a few hundred dollars. Wells Fargo has donated 800 homes to be demolished since 2009. JPMorgan Chase says it was one of the first banks to donate houses it couldn't sell or didn't think were repairable. Since 2008, JPMorgan has donated or sold at a discount 1,900 houses to city or county officials.
The banks do the deals because once the properties are donated, they no longer have to pay taxes or for upkeep. Tax experts say the banks may also be able to get a write-off for the donations. That appears to be a better strategy than trying to repair some of the homes, which according to a BofA spokesperson are more economical to demolish than fix up. Local governments like these deals because they get free land to develop or use for open space. Cleveland-based Cuyahoga County Land Reutilization Corp., which inked a contract with BofA, has been one of the most aggressive local-government organizations in striking these deals. And housing economists like these deals because they remove homes from the market that would otherwise sell for a low price or not at all, dragging down home prices in general. An oversupply of homes on the market has been one of the big problems plaguing real estate. According to the most recent data, it would take nine and a half months for the current number of homes on the market to sell. The housing market is generally considered healthy when supply equals six months of sales. So taking some of these homes off the market for good could remove some of the inventory drag.

The question is whether the banks will ever put up enough housing for demolition to make a difference. The Obama administration says it is working on its own plan to revamp its loan modification program in order to help keep more people facing foreclosure in their homes, which would reduce the number of properties that banks have to unload on the market. Some areas of the country are looking at how to speed up foreclosures in an effort to return some normality to the market. It's not clear that any of this will work. Certainly, the idea that we are at the point where banks would be better off knocking down houses that reselling them shows there is still something very wrong with the housing market. But what is clear is that banks and others are at the point where they are ready to try something new to boost the housing market. And that is a good sign for the future.

 Property tax appeal group assistance: www.PTAGflorida.com