Tuesday, December 13, 2011

Losing your home due to delinquent taxes

by Rod Williams

Often people who are behind on their mortgage are also behind on paying their taxes if the taxes are not escrowed. You do not want to lose your home due to unpaid taxes. Here is how the payment of property taxes works.

Taxes are due in arrears. That means, you are not paying your taxes for the upcoming year but for the year just past. The tax year is the calendar year. The tax bill for 20011 is mailed out in October 20011 and are due by February 29, 2012. After that date a penalty of 1 ½ % interests is added. The Trustee’s office holds the tax bills until March 1, 2013. Up until that time, the taxpayer, may go to the Trustees office and pay the taxes and the accumulated interest. After that March 1 date the tax delinquency is referred to Chancery Court. The Clerk and Masters office handles the taxes at this point. Metro will have filed a legal action to sell the property for back taxes prior to that March 1 date.

On March 1st, the Clerk and Masters Office will send out a notice to delinquent property owners saying they have 30 days to pay the delinquent tax lien or it will be sold. THE TAXPAYER MAY PAY THE AMOUNT OWED anytime before the sale and the lawsuit will be dismissed. (Cashier's Check). After the March 1 2013 date, additional court cost and legal fees are added. There is a title search that has to be done and other legal procedures prior to the Sale. So the first time it would be sold is June, 2013, but it could be later. There is usually one sale per month from June to December. The sales are advertised in our daily paper, THE TENNESSEAN, approximately twenty (20) days prior to the auction.

The owner may redeem the property up to a year after it is sold for back taxes but there is an additional fee of 10% per year to redeem it. Also, the person redeeming his home may have to make payments to the buyer for cost incurred.

The tax lien is the first place lien on a property, meaning the city gets their money before any goes to a mortgage company, so if a client is late on their taxes, the mortgage company would rather pay the taxes than let the property get sold in a tax sale. If a property is foreclosed upon, the mortgage company would have to pay the taxes anyway. If there is a mortgage on the property and it is sold at a tax sale, the mortgage company is the likely buyer, but the owner would have a year to redeem it. So, the mortgage company would rather pay the taxes for the homeowner, which they may do, and then foreclose rather than purchase it at the tax sale.

Few people who have a mortgage on a property lose the property due to a tax sale. The situation as described above is what usually happens.

I know of no agency that will help you pay your property tax bill. One of the requirements for the Hardest Hit Fund in Tennessee is that taxes and insurance be escrowed. However, if one otherwise qualifies, it is often possible to set up an escrow account at the Hardest Hit closing.

For more information call me, Rod Williams, 850-3453. There is never a cost for my services.

Thursday, December 8, 2011

Increase in the maximum Hardest Hit Fund allocation coming!

An increase in the  maximum Hardest Hit Fund allocations is pending!  The new maximum allocations will be as follows:
-          "Targeted counties" - up to $25,000.00
-          Non-target counties - up to $20,000.00
This increase in maximum benefit should enable some families to be able to qualify for a reinstatement of their mortgage, whom would not have otherwise have been eligible to participate in the program.  

The targeted counties are the counties in red on the below map. 

Monday, December 5, 2011

What is the Hardest Hit Fund?

What is the Hardest Hit Fund?

If you’re an unemployed or significantly underemployed Tennessee homeowner and are struggling to pay your mortgage, you can now receive forgivable loans through the Hardest Hit Fund Program — a free U.S. Treasury program administered in Tennessee by Tennessee Housing Development Agency (THDA). 

How much assistance is available?

The Hardest Hit Fund Program provides loans of up to $15,000 to cover mortgage expenses for up to 15 months ($20,000 and up to 18 months in some counties). These funds may be used to pay past-due, current and future monthly payments on mortgages and mortgage-related expenses such as property taxes, homeowner insurance and homeowner dues.

These "loans" are interest free and are forgiven at the rate of 20% a year. 
Program applications are handled by THDA partners, including my employer, The Woodbine Community Organization.

Am I eligible?

  • The Hardest Hit Fund Program provides loans to underemployed (income reduced by 30% or more) or unemployed Tennesseans who, through no fault of their own, are unable to make mortgage payments and at risk of foreclosure.
  • Homeowners previously unemployed or underemployed who are delinquent due to arrearages (overdue payments accumulated during such period) are also eligible for the Hardest Hit Fund Program.
  • Borrower eligibility criteria for the Hardest Hit Fund Program include:
    • Applicants must provide a financial hardship affidavit
    • Unemployment or underemployment must be through no fault of their own
    • Unemployment of underemployment must have occurred after January 1, 2008
    • Principal, interest, taxes and insurance must be greater than 31% of household income after reduction of income
    • Borrower must have no more than six months of reserves to cover mortgage payments
    • Borrower’s income must be below $74,981
  • Property eligibility criteria for the Hardest Hit Fund Program include:
    • Balance on house cannot exceed $226,100
    • House must be a Tennessee owner-occupied, primary residence
    • Houses are limited to existing single-family homes or condominiums or manufactured homes on foundations permanently affixed to real estate
How do I apply? 
Call Rod Williams at 615-850-3453

Friday, December 2, 2011

Lost your job? Don’t lose your home.

If you live in Tennessee and lost your job, there is a great new program to help you avoid losing your home. Not a lot of people know about it and your mortgage company may not even know about it. It is called “Hardest Hit Fund.”  This program is also available in about a third of the other states of the union but it can differ from state to state and I only know the details of how the program operates in Tennessee.

I am a housing counselor with the Woodbine Community Organization which is a HUD-approved housing counseling agency. I want to tell you about this great new program.

What will the program do: If you qualify, the program will do one of two things,
(1)  it will bring your loan current, or,

(2)  it will make your house payment for you for  up to a year or until $15,000 (or $18,000 in some counties)  has been paid out on your behalf.  

The program provides money in the form of a loan, but it is a “loan” that never has to be repaid, assuming you stay in your house for five more years.  The loan is forgivable at the rate of 20% a year. 

Who qualifies?   
One must have had an income reduction of at least 30%.  Usually, this means you must have lost your job, however, a reduction in work hours or reduction in commissions, or a reduction in earnings if one is self employed, may also qualify one for the program.  The job lost must have been through no fault of your own. If you quit your job, you do not qualify.  If you were dismissed for cause however and subsequently were able to get unemployment benefits, then you still may qualify.  There are other qualifying requirements, but a reduction in income due to job loss or job income reduction is the first test that must be met. 

How to make application:
The easiest thing to do is just call me at 850-3453 and I will walk you through it, or you may do the following:
 (1) Go to the website WWW.KeepMyTNHome.org , log in and answer the twelve qualifying questions and then complete the on-line application.  Be careful. Read the qualifying questions carefully before answering. If you are told you do not qualify and do not understand why, call me at 615-850-3453 and I will review your situation with you on the phone. 
(2) While at the Keep My TN Home website, choose “Woodbine Community Organization” as your counseling agency. That’s me. You will see a question that asks if you are working with a counseling agency. Please answer “yes.”  You will then see a drop down box and you are to select the agency with which you are working. Woodbine Community Organization is the last name on the list in the drop down box.
(3) After, the above is completed, call me, Rod Williams, 615-850-3453. Please call immediately. I will set an appointment with you to complete the Hardest Hit packet. If you do not reach me, please leave a message. You may also email me at Rodwilliams47@yahoo.com.

This is a great program, however not everyone qualifies. The same type documentation that one must provide when financing a home, one must provide to be approved for this loan, and more.  I will walk you through the process.  I have been a housing counselor for over twenty years and while I hesitate to brag on myself, I do what I do very well. I have all of the training and certifications one could have and recognitions and awards. I know how these programs work. If anyone can get you approved for the program, I can.

If you do not need this program, but have coworkers or relatives who may, then please pass this information on to them.  If your civic group, church group, or place of employment located in the Nashville area would like to have me come speak about this program to them as well as other loss mitigation options, I will be glad to do so.

As a word of caution: Please do not pay anyone to help you with mortgage default or loss mitigation services. Most companies charging to provide mortgage default resolution are scam artist who will take your money and deliver no service.  I often see people who have paid a company money to help them save their home, when if they had used that money wisely, it could have been part of a down payment on a mortgage default resolution work-out or at least paid the rent on their new lodging if their home could not be saved.  Also, it seldom helps to pay a lawyer to represent your interest when dealing with a mortgage company. Tennessee is a “non-judicial” state with regards to home foreclosure and there is little an attorney can do for you. 

If you have questions about the Hardest Hit fund or other mortgage default questions, feel free to call me,
Rod Williams (615)850-3453.