By Mike Colpitts
Home values have dropped so much that the majority of U.S. homeowners are overpaying on property taxes, according to a leading consumer protection group.
“We’re telling people to get an appraisal, an independent appraisal to find out what their property is really worth to see if they’re overpaying,” said Tom Martin, president of the National Mortgage Complaint Center. “We think a large majority of homeowners are paying too much, at least 20% to 30% above what they should be in this economy.”
An appraisal will provide homeowners the ammunition they need to contest a county tax assessment to get their property taxes reduced. Laws vary from state to state, but many states have limitations on just how far into a year they allow homeowners to contest dubious assessments.
Slow home sales and declining home values in the majority of the country are contributing to the economic problems many counties and states are experiencing. California, New York and more than two dozen other states are facing fiscal short falls and are in financial jeopardy as a result of homeowners not paying property taxes, which local governments depend on for funding.
Home values have declined an average of at least 50% from the markets peak in the majority of U.S. markets, and areas in particularly hard hit regions of California, Florida, Arizona, Nevada and other hard hit states have sustained losses up to 80%. The foreclosure crisis is pressuring home prices.
More than one out of four homes are underwater on their mortgages, and as home prices continue to decline in many areas of the country the number of homeowners upside down will increase, troubling local county and state governments.
“To be honest this housing market scares the heck out of us,” said Martin, whose organization fields telephone calls from homeowners having trouble with their banks and mortgage companies. Foreclosures are nearing 6-million U.S. properties since the start of the housing mess, and Martin says that other issues contributing to the nation’s troubled economy are halting a full recovery from developing, including the growing federal deficit.