Mortgage crisis takes a bite out of states and cities

LA Times ^ | 31 December 2007 | Stephanie Simon,

[shrinkermd]

Article begins with some anecdotal accounts of budget problems in a variety of cities. Then there are these paragraphs:

"...The mortgage crisis cuts into tax revenue in several ways.

The most obvious victim is property tax collection. Homeowners in foreclosure don't pay taxes on time. And as foreclosures spread, property values drop -- dragging down assessments and collections.

To take one example: In wealthy Fairfax County, Va., property values were jumping 20% a year. Now values are flat or falling. The number of foreclosures has exploded, from fewer than 200 two years ago to about 4,000 this year. The resulting $220-million budget shortfall has officials warning of significant cuts in services, including spending on public schools.

"Instead of having a soft landing, we've crashed," said Edward L. Long Jr., a deputy county executive.

When the housing market is flat, governments also lose out on the many transaction fees tacked onto real estate sales. This revenue stream is down in several states, in a few cases by 20% or more.

Even more distressing to budget planners is the decline in sales tax revenue. If people aren't buying homes, they're not buying refrigerators and washing machines to furnish them. Nationwide, orders for durable goods have been flat for the last four months. (November saw the first slight uptick: 0.1%. Economists had been hoping for 2.2%.)

On average, states receive about a third of their revenue from sales taxes. So it hurts -- deeply -- when families don't have reason to splurge on the new sofa and coffee table that will make a just-purchased house look like home..."

[flintsilver7]

I’ve only lived in Fairfax County for three years now, and I know that my property values are automatically updated every year. My house is valued lower than all the neighboring houses (which I know is incorrect) and Fairfax County sent out a personal inspector to update it.

[Carry_Okie]

I wonder, if there isn’t some legal way for the US to just completely dis-own Kalifourneeyah?? Wow...

I'm not going to cede the good real estate to the left. If we weren't in this for real, you wouldn't know where you were headed. You need California, if only as an example of what the internationalists have in store for you.

[JackOfVA]

My house is valued lower than all the neighboring houses (which I know is incorrect) and Fairfax County sent out a personal inspector to update it.

Interesting--I've never seen a tax inspector in the 32 years I've lived in Northern Virginia. (10 years in Fairfax City and 22 years in Fairfax County.)

Jack

[flintsilver7]

Well, technically, neither have I. I got a door hanger with a lot of information and a number to contact. I never followed up (why would I?) and they never did either, so maybe they aren’t as interested as it might seem.

[ex-Texan]

It takes the Aussies to report the truth about what is going on in America to Americans. How ironic is that? You will need to use MSIE to view the video:

USA Mortgage Meltdown Video

Properties being sold in California for 30% - 40% below what people paid two years ago: Foreclosures. And it will get a lot worse. Very quickly. 'Just the tip of the iceberg, old chap.' Wait until 2009.

Who really own your house? A Saudi prince? Or some wild eyed millionaire in Dubai? Or a Beijing billionaire? Hedge fund in Germany or France? How many time was your mortgage sold and resold and resold by Wall Street? Do you even know or really care?

You ought to know. The foreclosure process is a rubber stamp game as played by the courts. Next . . . Stamp! Stamp, stomp, stamp . . . !

Click on the *.jpg to learn more . . .

[colonialhk]

Fairfax is a disaster area due to liberal changes made in the last few years.

[M. Espinola]

That’s an alarming map. The only geographic areas not displaying the expanding problem are unpopulated.