Mortgage Company Fights Tax Deed Sale

One of the most popular questions people ask me, “Do bank mortgages really get wiped out by a tax deed sale?” Yes! As long as the bank was properly notified.
Recently an Appeals Court ruled against a mortgage company that tried to fight a tax deed sale. This all started about a year ago when Wells Fargo (formerly Wachovia) received notice that one of their Indiana properties they had a mortgage on was going to the tax deed sale. Instead of SOUNDING THE ALARMS at the bank (or going to DEFCON 1!) they sat on the notice and didn’t do anything until it was too late. Indiana like most tax deed states notifies mortgage holders of pending tax sales, Florida gives the lender at least 20 days to respond. Apparently nearly a month’s notice is just not enough time for the these banks to take action.
I often watch properties with a mortgage go to tax deed sale and sure enough, the larger the bank the less likely they will redeem the property in time. I don’t know if it is because these corporations are so big that information crawls at a slow pace up the corporate ladder or they just get more mail than they can handle. By the time the notice is given to someone who would know better… it’s too late. In most cases these notices are sent Certified Mail, which should indicate to the person receiving the mail… THIS MIGHT BE IMPORTANT. All I can say is their loss is sometimes a tax deed investors’ gain.

Wells Fargo fought the sale in trial court and when they lost there they filed an appeal. Wachovia appealed on the basis that they believed the notice should have been sent to an executive officer or agent of the company instead of how the State Law governing tax deeds dictates. This October the Appeals court ruled against them. Wells Fargo lost the case and their mortgage.

Indiana law says — Each tax sale notice must be sent to the owner of record at the last known address of the owner and to “any person with a substantial interest of public record at the address for the person included in the public record that indicates the interest.”

You can read more about the ruling in the Court of Appeals’ opinion .

Originally posted to Blog on  12/6/2011

Are your property taxes too high?

If you disagree with your real estate property value, tangible personal property value, or your exemptions, you should first contact someone at the county property appraiser’s office. IF you are still unable to resolve the matter, you may file a petition with the County Value Adjustment Board. They will review your complaint, send out an inspector to look at your property and may even have a hearing to discuss your situation. There is a small fee for filing the petition with the Value Adjustment Board. Most counties require you turn in your petition in the fall.

You can contact your county property appraiser by finding your county in our list by clicking here . Here’s an excerpt from an interesting story we found on about these assessments.

“The tax man cometh: How much more will you pay?“ By:

Larry Shubert is a snoop.

As a property tax assessor for the city, he’ll go to great lengths to find out how much your house is worth. He’ll inspect your deed, figure out the age of the bricks in your home, and even sprint around your property. Today, he’s walking around Roxborough (Philadelphia, PA) assessing houses.

“This is going to be the first house that’s going to be a little bit of a challenge because you look at it and you go, ‘OK, What is it?’ First of all, it looks like a one-story from here,” says Shubert. “But I think a side view will give you a better idea. See, now looking from that end it doesn’t look like anything. From over here you got a side door, you got a two-car detached garage. You actually have a half a story.”

It’s not easy to trick him. If you thought you’d be able to build that deck without the city noticing, forget it. He’ll watch you from above, too.

“We take aerial views of the properties,” says Shubert. “Now this particular property I wasn’t sure whether we’d be able to see anything from the rear or not. Well here it shows that there’s an addition on the back. It’s a sunroom. Now I have to go back and check to see if that’s on our books.”

Maybe you’ve seen Shubert or one of the city’s other 65 tax assessors around town. They’re re-assessing all 577,000 properties in Philadelphia, in an attempt to fix the city’s broken property-tax system. For years it assessed people’s homes unfairly and inaccurately.

So what are they looking for, exactly?

“We’re trying to get the characteristics on each house,” says Shubert. “In other words … bedrooms, baths, kitchen, living room, dining room, basement, whether it’s finished or not, what kind of heat they have.”

The assessors’ work will bring some folks’ taxes down, and others’ up — which is frightening for homeowners. Especially because, all told, the city expects to collect more after the re-assessment than before it.

That means Shubert sometimes gets yelled at. Even by old ladies.

He’s jotting down notes outside of Theresa Conroy’s home in Roxborough when she pokes her head out of the door. He introduces himself, and she warns him not to raise her property taxes — or else.

“I’m gonna get pretty damn mad!” she says.

This doesn’t keep Shubert from genuinely digging his job. As he walks down the street in Roxborough with Richie McKeithen, the city’s chief assessment office, they talk about the thrill of figuring out how much homes are worth. Seriously.

“When you put a value on the house and it sells for about that, that’s like, wow!” says McKeithen. “That’s almost as good as, like, hitting a number or something. It’s a rush.”

It’s a good thing that Shubert likes his job. Because he’ll have to assess 13,000 properties in Northwest Philly, about twice as many as one assessor should have to do. The city’s Office of Property Assessment is understaffed.

“When you have 13,000 accounts, it’s a lot. I mean, there’s a lot of stuff to do,” says Shubert, adding that a “25-unit new construction could take me two days.”

The Nutter administration says it’s planning to hire about 70 more assessors soon. Still, this raises concerns about the quality of work the assessors will be able to do.

The data that Shubert collects is just the first step in the complex process of assessing. The city also must consider how much nearby homes are selling for, and send assessors out again this spring to double-check their data.

Mayor Nutter wants to finish this by next fall, which would mean updated property tax bills by 2013. But since fixing the property-tax system will require cooperation among the Nutter administration, City Council and the state, it’s not a done deal.
(original article located at: )

Originally posted to Blog on 12/5/2011

Mo’ Money, Mo’ Money

Here is what I mentioned earlier. If you haven’t been bidding at the tax deed sale, you may not realize the deposit amount for a winning bid has increased. For each piece of property purchased, the successful high bidder is required to pay a non-refundable deposit equal to a minimum of exactly five percent (5%) of the final bid or $200.00, whichever is greater, at the time of the sale. So for example: If you are the high bidder at 10,000, you will be required to pay 5% of that 10,000 right away. In this case 5% of 10,000 is $500. If the 5% amount had been lower than $200 you would be required to pay $200. That’s where the 5% or $200 whichever is greater comes in. You can pay that deposit in the form of cash and/or cashier’s check. Increasing the amount required at opening bid may take some bidders out of the game and it may also reduces the number of properties you choose to bid on since you will need that 5% or $200 amount for EACH property you win at the auction.

In accordance with section 192.0105(3), Florida Statutes, the property owner can redeem his or her property (pay off the taxes) up until the time that the high bidder pays the full payment to the Clerk and the tax deed is issued. This means that you have not truly won the property until your payment is made preventing the homeowner from paying the taxes and keeping their property.

One more thing to remember, if you miss the deadline to get your deposit in electronically for the online sale you can always pay in person. You can make that deposit in person at the Clerk’s Office in the form of cash or cashier’s check no later than 3:00pm on the day before the sale.

Originally posted to Blog on

Why Your Purchase Price and Rehab Costs are Going Up

Be sure to factor in the new EPA rule on your next house rehab or purchase. Beginning in April 2010, federal law will require that any contractor that performs renovations, repairs and painting projects that disturb lead-based paint in homes, child care facilities, and schools built before 1978 must be certified and follow specific work practices to prevent lead contamination. This law will apply to single-family homes, as well as multi-family cooperatives and condominiums. “Do it Yourself” landlords may also be required to hire certified lead paint contractors.

 These rule apply if:

  • your project disturbs 6 square feet or more of paint per room inside,
  • or 20 square feet or more on the exterior of a home or building.
  • Electrical or plumbing work can also be included.

There are waivers homeowners can sign but not every projet. A homeowner may also opt out by signing a waiver if there
are no children under age six frequently visiting the property, no one in the home is pregnant, or the property is not a child-occupied facility.
Another exemption is if the house or components test lead free by a Certified Risk Assessor, Lead Inspector, or
Certified Renovator.


Originally posted to Blog on

10 Things You Must Do before Year End

10 Things you must do before the year ends to reduce your taxes

  1. Charitable Donations
  2. Flexible Spending Account (FSA)
  3. Mortgage Interest
  4. Real Estate Taxes
  5. Homebuyer Credits
  6. Medical amd Miscellaneous Deductions
  7. Pension or IRA Contributions
  8. Cash Gifts
  9. Capital Gains & Losses
  10. Go Green

Charitable Donations – If you are making donations to the Salvation Army, Goodwill or your church make sure you do it before midnight on Dec 31. Most importantly make sure you have a receipt of your generosity since these contributions may be tax deductible. If you are paying by check or credit card be sure to ask if they will be processing the payment before the end of the year. Don’t go overboard, if a single item has a value of over $500 the IRS may require an appraisal. Consult with your Certified Public Account for information.
Flexible Spending Account (FSA) – Use it or lose it! If you haven’t used the money in your FSA, the IRS allows purchases to be made through March 15th to account. Ask your employer for a debit card for your FSA spending. Make sure your plan allows for it.

Mortgage Interest – Are you still looking for another deduction? Make January of 2010’s mortgage payment in December of 2009. Just don’t forget to add the extra month’s worth of interest onto the IRS Form your mortgage company sends you (Form 1098). This will increase your deductions for the 2009 however you won’t be able to deduct the payment from your 2010. You may want to do the same for interest on your student loan payment.

Real Estate Taxes – Same as above for your real estate taxes. Make your January 2010 real estate tax payment in Dec 2009. If you may be hit with the Alternative Minimum Tax (AMT), don’t pay it since taxes are not a deduction under the AMT.

Homebuyer Credits – If you are a new home owner and have never owned a principal residence in the past three years, you may be eligible. You have to purchase the home before May 1, 2010, and close before July 1, 2010. If that is the case, you can qualify for a 10% refundable credit your purchase price. The credit is maxed out at $8,000. Not a new homeowner? You may qualify if you’ve owned your principal residence for at least five years and buy a new principal residence within the time limits stated above. This credit limit is $6,500. The homebuyer credits phase out for single taxpayers with adjusted gross incomes of $125,000 to $145,000 and for joint filers with incomes of $225,000 to $245,000. If you don’t want to wait until 2010 to cash out on one of these credits, you can claim it on an amended 2008 return, even if the purchase was in 2009.

Medical and Miscellaneous Deductions – Health insurance premiums are deductible as long as you didn’t pay them with your flexible spending account. Medical expenses that exceed 7.5% of your adjusted gross income count. Miscellaneous itemized expenses have to exceed 2% of your AGI. If you think you may not hit those minimums then you can pay some of the professionals you do business with, such as your orthodontist or CPA, before 2009 is over for services you will be using in 2010.

Pension or IRA Contributions – This is very important if you are self-employed. Unless you expect tax rates to increase, you may want to pay your tax “tomorrow” rather than today. If you’re contributing to a retirement plan such as a 401k or a 403b, you can put in $16,500 this year and the same amount in 2010. If you’re 50 or older, you can put in an additional $5,500 as a catch-up contribution.

Cash Gifts – If you will ever be subject to the estate tax, then you should make your 13,000 tax-free gift before the stroke of midnight.

Capital Gains & Losses – If you have capital gains, remember that any net capital losses over the $3,000 allowed on your 2008 tax return should be carried forward to offset those 2009 gains. If you still have net losses, up to $3,000 may be used to offset ordinary income for 2010. If you have net capital gains in your stocks or real estate investments, sell enough of the losers to offset the gains. If you have more losers, sell at least enough to get the $3,000 offset against ordinary income.

Go Green – Buy energy efficient improvements to your home and qualify for a credit of 30% of the cost with a maximum limit of $1,500. This can be for items like more insulation, installing energy-efficient windows, heating and Ac systems also qualify.

The IRS has some more information on deductions at their website.

Originally posted to Blog on 12/28/2009

The Truth About Knowledge

The Truth About Knowledge

One of my friends and students sent me this great message or should I say illustration. Thanks Carolyn Segraves… perfect illustration of what I have been saying. ******Click Here to View It.

Originally posted to Blog on 9/23/2009

eBay Auction

image-ebayNew .01 eBay Auction

This is a tax lien certificate for sale. Please read the listing before you bid. Click the link above.

Originally posted to Blog on 9/21/2009