Hat tip to SM for sending this along, from the AP:
WASHINGTON (AP) — The Obama administration has approved five state-designed plans to help homeowners as part of a $1.5 billion effort to assist areas slammed by the housing bust.
Treasury Department officials, who spoke on condition of anonymity because the decisions had not yet been made public, said plans for Arizona, California, Florida, Michigan and Nevada had received approval.
The state plans are projected to help at least 93,000 homeowners. That’s a small part of the administration’s main existing $75 billion mortgage assistance program, which is widely viewed as a disappointment.
President Barack Obama unveiled the state assistance effort in February. Since then, state agencies have designed their own approaches, largely focused on borrowers who owe more on their properties than their homes are worth or those who have lost their jobs.
Officials say the state efforts could be used to make changes to the administration’s broader mortgage assistance plan. The state agencies are planning to work with local housing groups to put the plans in place.
The largest recipient of the funding is California, which will get nearly $700 million to assist about 38,000 borrowers. Florida is getting the second-largest pot of money, $418 million. That will help about 30,000 borrowers.
Michigan will receive about $155 million to assist 16,000 borrowers, while Arizona will receive $125 million for 4,000 borrowers. Nevada will receive $103 million for about 5,000 homeowners.
Besides these states, the Obama administration is providing an additional $600 million in financial support to help homeowners in states with high rates of unemployment.
Those states — Ohio, North Carolina, South Carolina, Oregon and Rhode Island — have submitted plans to the Treasury Department. They are being reviewed now, with approvals expected in August.
The Obama administration has rolled out numerous attempts to tackle the foreclosure crisis, which have met with limited success.
More than a third of the 1.2 million borrowers who have enrolled in the Obama administration’s main mortgage modification program have dropped out, officials said this week. About 340,000 homeowners, or 27 percent of those who started the program, have received permanent loan modifications and are making payments on time.
Sigh… Keep kicking the can Obama. You think that you’re buying votes by keeping people in houses but you’re not. The people that you’re “helping” are just going to default at a later date. Responsible people like myself with money that you’re trying to trick into buying properties at the current inflated prices will become the next political force.
kicking it until after the november 2012 elections so they get reelected…
You can’t fight market foreces forever. Now that the tax credit has expired, homes sales were down 33% (just announced). Also here in SD County, MLS listings (accord to ZIP) has gone up to over 12,000 listings today. A few weeks ago it was only 10K. Anecdotal information from my circle of friends – 3 people have put their homes/condos on the market this summer because they need to “move on” as they say. My two cents? We are in housing price decline part II.
“You can’t fight market foreces forever.” So true.
This is like BP trying to fight the pressure coming out of that flawed, busted oil pipe.
Imagine this: that itty, bitty, ship on the surface is going to have to pump “mud” @18,000 feet beneath the surface of the water with enough force to counter the upward force and pressure of oil and gas shooting out of the Earth. Good luck! We’ve never done this before at this depth. Everybody gets to see a grand science/technology experiment in action. What are the odds of it working the first time?
Our housing debacle? Been there and done that (see “roaring 20’s & subsequent Depression) many places and times around the world.
We keep diggin’ a hole and expect the hole to disappear. Am I missing something?
Consultant.
Yes, you’re missing that this time we’re having our children and grandchildren pay for our foolish experiments and flawed social engineering.
Chuck
“homes sales were down 33%”
Anything will sell if the price is right. If there is no buyer, then the price is too high. The desire to own a home in America is so strong, people will always buy when prices hit their target range.
ArtEclectic,
If you’re interested, it said that houses in the West (of which we’re a part) were down 53%.
Fed cheeze brought out a boatload of first time buyers.
Chuck
Ironic that all the Californians are concerned about distorted markets and passing debt to next generations, when Prop 13 contorted the market with frozen assessments and bankrupted the future by making it impossible to pay for anything. Glass houses/rocks and all that.
As for the plan, I think its good the administration is still trying to smooth out the market, but I’m not sure the program as currently enacted really does the job. Maybe over time the results will improve. I’m also not sure what a better approach to distributing such relief is.
Former RB,
There are only a few types of people who are still in favor of Prop 13.
I’d say very few of those people also believe that we’re on the wrong path with federal stimulus.
What makes federal back-door bailouts of the banking cartel a bad choice is the same reason that Prop 13 is a bad idea.
chuck
By my 3rd grade math that equals about 18K per borrower for California, what good is that going to do when most are underwater by over 100K?
Jim,
It isn’t about bailing out homeowners. It’s about bailing out banks. Every drop counts.
The reality is Prop 13 has helped the State of California immensly during down times in the Real Estate cycle-especially during this “deep” cycle. Let’s face it, it is a FACT that our State Govt has little financial disipline. Regardless of how much money California has coming it, they find a way to spend EVERY dollar, and then some!!! Let’s take away Prop 13: In 2006, the state budjet would have been higher due to properties being taxed at their true 2006 values. The State of California would have found a way to spend (waste in many cases) and surely not save, this additional money–whoopie!!! Now, in 2010, property values are down 30%+ from 2006. Without Prop 13 in place, their revenue from prperty taxes would also be down 30%, OMG what now–raise taxes? lay off? borrow? How about we raise property taxes to 5% of value, that will certainly help us!!! Thanks to Prop. 13 providing some cushion, revenues from Property Taxes are down around 3%, and actually starting to increase again.
To some extent Prop 13 is a “red herring.” Before the housing crash, the average California resident moved about every 7 years (Jim, help me on this figure). Most young couples sold their smaller home and moved to a larger home – thus the home they sold was re-assessed to its current value (and tax) and their new home was assessed at its current value and tax. By this standard, most homes turn over every 10 years or so, and the taxed DO go up. I am exhibit A in this, having “moved-up” 4 times since 1987. Each time I paid higher taxes.
Prop 13 does help seniors who tend to stay in their house for 20 years after retirement. That is why prop 13 was passed in the first place because seniors were being forced out of their homes by high taxes. At this point in history, it is a mute point, because housing values have come down. The condo I bought in April of 2009 (at a big discount) is already down 50K, and I am applying for a property tax reduction. . .ditto most of my neighbors.
Yes, it was that on average people moved every 7 years, and more recent surveys have stretched out to 10-11 years.
I think people should move every 6-12 months! 🙂
It’s amazing how cynical the whole housing debacle has made me. There’s no longer even a pretense of sound policy for rational, long term reasons. It’s all just handing out deep-fried twinkies because that first bite tastes so good.
The part of Prop 13 that requires a 2/3 vote to raise taxes is bankrupting the state. Higher taxes are the answer. (And I’m an out of state taxpayer.) If seniors could have their assessments frozen or limited to a COLA increase, then I would be ok with that, but my assessments here went up with the bubble and are going back down. Shocking – I’m not in the poor house.
“Higher taxes are the answer.”
In case that post was not sarcastic….
http://globaleconomicanalysis.blogspot.com/2010/06/illinois-leaps-ahead-of-california-in.html
The real intended beneficiaries of Prop 13 were not elderly homeowners, or homeowners at all; they were just the poster children who were used to sell it. The big winners were businesses, whose properties used to be considered to have “changed owners” when the businesses were acquired by other companies. Before Prop 13, business property taxes were almost 50% of CA property tax revenues; now they’re under a third. In the modern economy where businesses expand by buying other businesses rather than by actually making the ones they have grow, it’s been a bonanza for them.
To those that think the inequalities of Prop13 have anything to do with old ladies and pensioners, you’re falling prey to the propaganda.
The real money is in aged commercial properties.
Again, how much does the capitol records building pay in property taxes?
Prop 13 may even out revenue for the state, but at the price of fairness to private citizens and newcomers.
Chuck
We pay enough taxes in California—Period. ANYTHING that increases taxes in California will NOT get my vote–Anyone recently get a Vehicle ticket lately? A $25.00 ticket (base fine) now costs $178 including taxes and fees. How about a galon of gas–ever look at the breakdown??? If you are going to charge higher property taxes, the do away with State Income taxes. How about Texas’ system–those who do not own property pay no income tax, nor do they pay Property Tax (pretty easy for someone starting out to get ahead!). Those who can afford to own property pay about 3% property tax, but they are NOT paying State income tax.
“19.To those that think the inequalities of Prop13 have anything to do with old ladies and pensioners, you’re falling prey to the propaganda.
The real money is in aged commercial properties.”
Unless you’re Dianne “CB Richard Ellis” Feinstein, Babs Boxer or Bela Lugosi Pelosi. . .
Amen.
Prop 13 serves as the one rein on spending in Sacramento. Does anyone here seriously believe that CA would not spend every penny coming in and then some, regardless of revenue?
Uh, Bubblenerd, what does that prove exactly? That California is a better credit risk than Greece, Portugal, Dubai and Iraq. Its good to set your goals low enough that you can achieve them.
But, I would be a-ok with reassessing all real estate at market rates, with an exemption for the elderly.
Former RB Resident,
“But, I would be a-ok with reassessing all real estate at market rates, with an exemption for the elderly.”
My guess is that you’re soon to fall into or are currently in the “elderly” demographic?
“Uh, Bubblenerd, what does that prove exactly?”
First take a look at the pension lists for CalPers and CalStrs towards middle of page. That’s what they’re doing with your taxes. The more you raise taxes, the more money there is for that kind of nonsense spending.
Besides, the total cost of government (local, state, federal) is now at 44% of GDP. 44%! The government taxes and spends 44 cents of every dollar produced! Greece’s government spending is/was at 50% of GDP, and they’re bankrupt. And soon we’ll be.
Shaddash-
First they will re-access, then they will raise! Then, pretty soon, we will be paying 2% in property taxes and, all along, they will still be complaining that they “can’t balance the budjet”–they are like junkies–the solution is NOT more revenue. KEEP PROP 13 IN PLACE!!!
The part of Prop 13 that requires a 2/3 vote to raise taxes is bankrupting the state.
LMAO! CA doesn’t have a revenue problem, it has a spending problem. CA taxes already rank among the highest nationwide, and we don’t get value for those.
I favor Prop 13 protection **for primary residences only,** and am also opposed to bailouts.
Like tj said, we have a *spending* problem, not a revenue problem. I could fix our problems within two years, but it would be political suicide. 😉
Prop 13 should be limited to primary residences. Not second homes, not rental units, not commercial properties (maybe an exemption for very small businesses like a barber shop or auto repair business-but right now the owners of skyscrapers in downtown LA qualify, and so do Walmart and Target). I would also want an income limit (if you are billionaire and bought your Beverly Hills mansion for $75,000 in 1970 (currently worth $10 million), you shouldn’t benefit from prop 13).
That Beverly Hills mansion will sell one day, and then the state will get the increase in tax revenue–until then – don’t touch it. I just closed a deal in Pt. Loma where the seller had been paying $1,250/yr in taxes, it will now be $12,000/yr.
Prop 13 should be modified to change the definition of “changing owners” of business properties back to what it used to be. When one business buys another, the value of the assets of the business being purchased, from desks and chairs to the land the business sits on, are calculated into the acquisition price and they are all being bought by the acquiring business. When Corporation A buys Corporation B it is absolutely buying any real estate that B owns, and that real estate is changing owners just as surely as the house down the block does when it sells.
Agree with you, GeneK and Geotpf. Prop 13 should apply to primary residences only, with a possible exception for a single commercial property per person/entity (though I’m not sure how to regulate that efficiently), and the assessment should change with change of ownership.