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If You Can Still Afford To Pay Your Mortgage Payment...Watch Out!!!!!


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2020 Aug 3, 2:37am   1,079 views  27 comments

by ohomen171   ➕follow (2)   💰tip   ignore  

#mortgagecompanyripoff As I have said many times, the devil is always in the details. In the United States, if you have a mortgage loan on your home, the lender keeps an escrow account for you. They collect money from you each month. This money is used to pay your property taxes and homeowner's insurance. It is convenient for you. It saves you having to reserve money for these critical payments. It is great for the lender because it protects their interests. They want to make sure that taxes and insurance are all current.
A few days ago, my sister was upset because her monthly charges for the escrow account had been increased hundreds of dollars without justification. I urged her to hire a lawyer to protest this arbitrary increase. Friday, I picked up our mail. There was a letter from our mortgage company. They claimed that there was a shortfall in our escrow account. They raised the monthly escrow withholding from $884.00 to $1,200.00. This is strange. Our property taxes have not increased. Our insurance premiums have not increased.
Then I saw the light! We have a disaster in this country. Roughly 28- million families are able to keep their apartment or house because of a moratorium on foreclosures and evictions. If this ban fell away, we would see massive evictions and foreclosures. Politicians of all parties grudgingly extend this moratorium a month or two at a time. With an election coming up, no one wants to have thousands or millions of their constituents on the street.
The mortgage companies are suffering a huge loss in interest income. If they have to start a big round of foreclosures, there is a fascinating statistic that I learned during the 2008-2010 financial meltdown. Each foreclosure costs the mortgage company $50,000. Back in the last financial crisis, these companies got bail outs from the US government. Such a bailout is questionable this time. So, the mortgage companies are collecting extra cash from those who can still pay to offset their losses.

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1   RWSGFY   2020 Aug 3, 4:00am  

ohomen171 says
In the United States, if you have a mortgage loan on your home, the lender keeps an escrow account for you. They collect money from you each month. This money is used to pay your property taxes and homeowner's insurance.


No. I don't have any fucking escrow account with my lender. I pay my fucking taxes and ins premiums separately from my mortgage.
2   joshuatrio   2020 Aug 3, 4:40am  

As one poster used to say on this board "cash, or fuck you."
3   zzyzzx   2020 Aug 3, 4:54am  

Bring back mandatory minimum 20% down payments!
4   🎂 Tenpoundbass   2020 Aug 3, 8:44am  

In a few months I will owe less than the bank is holding in Escrow, I'm going to tell them to take it and pay off the mortgage and tell the insurance company to pound sand.
5   Shaman   2020 Aug 3, 9:02am  

Anyone who bought a house since The Great Recession most likely has an escrow with their mortgage provider.

My payment hasn’t changed since the Covid, but I’ll be on the lookout for that.
6   🎂 Tenpoundbass   2020 Aug 3, 2:10pm  

My Escrow has been going up from tax increases and insurance gouging. They are holding 8 grand of mine.

Ten years ago when I bought, the Tax was 1200 a year, and insurance was 1800. It's gone from 3K to 8K

3K for taxes and 5K for Insurance.
7   SunnyvaleCA   2020 Aug 3, 2:24pm  

ohomen171 says
It is convenient for you.
Yes and no. When I refinanced a while ago an escrow account was a required part of the deal (to get the lowest interest rate). I figured I better check that the company paid my taxes, but they had not! I called the mortgage company and: "For homeowner's convenience, escrow won't pay the first installment of the taxes. Didn't you see paragraph 7 of page 120 of your mortgage documents?" Nice little trap theres.
8   🎂 Tenpoundbass   2020 Aug 3, 2:43pm  

TrumpingTits says
That is the ONE good thing about Cali: Once your property tax rate is set, it is set until you sell the property, for the most part.


It's set in Florida too, especially if you're homestead exemption. They don't reappraise your house, they just up your millage. And keep raising Fire and Rescue.
I'm paying this on a 160K purchase, I can just imagine what people in Jumbo loan homes are paying in taxes.
9   MisdemeanorRebel   2020 Aug 3, 2:56pm  

Everybody ought to check with the tax department before and immediately after they buy a home.

In well run states like Florida you can check in seconds.
10   Shaman   2020 Aug 3, 3:15pm  

Tenpoundbass says
I'm paying this on a 160K purchase, I can just imagine what people in Jumbo loan homes are paying in taxes


I bought my house four years ago for $735,000. The tax has increased in that time from just under $9,000 a year to maybe $9300 a year.
So no, it’s not set. It’s only “set” if you bought a really long time ago when it was worth like $100,000 and then it’s only appreciating at 2% per year for taxes, so in 30 years it might go up to $200,000 for tax assessment but be worth a cool million in value.
It’s one of those “I got mine and fuck everyone else” things about California.
11   SunnyvaleCA   2020 Aug 3, 3:53pm  

The funniest thing is that mortgages out here in California don't seem to require earthquake insurance. This is for free-standing houses; I don't know about condos.
12   SunnyvaleCA   2020 Aug 3, 3:58pm  

Shaman says
if you bought a really long time ago when it was worth like $100,000 and then it’s only appreciating at 2% per year for taxes, so in 30 years it might go up to $200,000 for tax assessment but be worth a cool million in value. ... “I got mine and fuck everyone else” things about California.
I

Yup.
Slight correction: 2% per year doubles in about 36 years. Check out the "rule of 72" — not quite accurate, but really handy.

My neighbor's house has a Zestimate of over $2MM and taxes barely over $1000/year. Pretty nice! The downside... they will die soon. (Yeah, you needed to buy in the early 70s!) Upside... not only do the heirs get a $2MM house free and clear with the capital gain basis reset, but they inherit the tax windfall as well! So, it's really: "I got mine and got mine for all my kids and grandkids, so fuck everyone else." The rich get richer in progressive/Democrat California!
13   RWSGFY   2020 Aug 3, 10:34pm  

SunnyvaleCA says
The funniest thing is that mortgages out here in California don't seem to require earthquake insurance. This is for free-standing houses; I don't know about condos.


With condos it's rolled into HOA fee, I believe.
14   just_passing_through   2020 Aug 4, 5:14am  

Tenpoundbass says
5K for Insurance.


Ballooned after some hurricanes eh? I have ocean front in Maui maybe 8ft above sea level and pay less than 1K. It's worth about 550K. That's robbery!
15   just_passing_through   2020 Aug 4, 5:16am  

TrumpingTits says
Once your property tax rate is set, it is set until you sell the property, for the most part.


I don't think this is going to last much longer. Imagine paying peak price for a house then a few years later that goes away and your taxes spike causing an commensurate drop in real estate prices.

Maybe I'm wrong but it's in my calculus right now...
16   zzyzzx   2020 Aug 4, 6:13am  

Tenpoundbass says
3K for taxes and 5K for Insurance.


If you pay cash for your house, no escrow and insurance is optional.
17   zzyzzx   2020 Aug 4, 6:13am  

just_adhom_preaching says
Ballooned after some hurricanes eh?


Is there any doubt in your mind?
18   zzyzzx   2020 Aug 4, 6:15am  

just_adhom_preaching says
I have ocean front in Maui maybe 8ft above sea level


I would not feel comfortable owning property only 8ft above sea level near the shore anywhere.
19   just_passing_through   2020 Aug 4, 6:22am  

zzyzzx says
I would not feel comfortable owning property only 8ft above sea level near the shore anywhere.


It's not for the faint of heart. However there is insurance for losses, repair, lost income (I lease it out) etc.,.

Really I'm prepared for everything except the local communists.
20   B.A.C.A.H.   2020 Aug 4, 6:29am  

Shaman says
I bought my house four years ago for $735,000. The tax has increased in that time from just under $9,000 a year to maybe $9300 a year.
So no, it’s not set. It’s only “set” if you bought a really long time ago when it was worth like $100,000 and then it’s only appreciating at 2% per year for taxes, so in 30 years it might go up to $200,000 for tax assessment but be worth a cool million in value.


Local government is addicted to that revenue like it's crack cocaine. Maybe meth is a better analogy.
21   ForcedTQ   2020 Aug 4, 9:02am  

SunnyvaleCA says
The funniest thing is that mortgages out here in California don't seem to require earthquake insurance. This is for free-standing houses; I don't know about condos.


It depends on what earthquake zone you're in and if it's conventional or not. I thought non-conventional might require earthquake insurance if in zone 4, alot of California is in zone 3, less severe.
22   ForcedTQ   2020 Aug 4, 9:10am  

ThreeBays says
Escrow accounts are highly regulated. They're only allowed to charge the amount to avoid a shortfall plus a buffer of up to 1/6 for cushion.


Exactly. They go through a review process once a year where they analyze for annual property tax increase plus increase in property tax if they have the information. They then charge the account for additional monthly payment amount if it is shown to be lower than the lowest level allowed for the account or they cut you a check if the projection shows an excess for the year.
23   Shaman   2020 Aug 4, 9:13am  

B.A.C.A.H. says
Local government is addicted to that revenue like it's crack cocaine. Maybe meth is a better analogy.


What if I told you that if Democrats repealed prop13, you’d instantly become a Republican?
24   B.A.C.A.H.   2020 Aug 4, 10:20am  

Shaman says
What if I told you that if Democrats repealed prop13, you’d instantly become a Republican?


Homie don't join no political parties.
25   SunnyvaleCA   2020 Aug 4, 12:44pm  

Shaman says
B.A.C.A.H. says
Local government is addicted to that revenue like it's crack cocaine. Maybe meth is a better analogy.


What if I told you that if Democrats repealed prop13, you’d instantly become a Republican?
Surprisingly, there hasn't been any repeal yet. I have been expecting that corporations would lose the prop13 protections first, but even that hasn't happened. I would like to see prop13 only count to your primary residence — that wouldn't kick anyone out of their home, by definition. It would also mean that people claiming out-of-state residence to skip CA income tax wouldn't be able to get prop13 benefits.
26   just_passing_through   2020 Aug 5, 9:30am  

SunnyvaleCA says
I have been expecting that corporations would lose the prop13 protections first


Oh, I think that's how it'll go too. This coming election will git those mean ol' corporations. I don't know how many times I've heard Californians lament them.

I expect some to leave the state, other to raise prices and still others to fail after that.
27   just_passing_through   2020 Aug 5, 9:31am  

TrumpingTits says
There are exceptions. Like you can challenge the calculated tax amount after the value of your house drops.


Good point. I hire a company to do that for in with respect to my Texas houses. Saves me quite a bit even after splitting it with them.

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