Anyone here use this service or familiar with how they work?
I am in a bind because I have not been able to pay the property taxes on my house due to, well, a lot of other stuff that has taken all my funds. I have already accrued some penalties and interest, but now it is getting to the point where the county has their appointed legal company after me, and if I don’t pay soon, then they may start trying to take my place from me for non-payment.
Some pertinent information: I am in Texas, property taxes are quite high here since school taxes are included, making up about 80% of the tax amount.
I own the property clear, it is my homestead, and it is worth a fair amount. Under normal circumstances, I could borrow against the property and pay my taxes, but I am unable to get a loan due to a circular situation where I don’t meet the requirements of the bank to get the loan, and are unable to meet these requirements because I cannot afford the needed repairs and such.
I am considering one of these tax payment services, but am not sure just how they work and what kind of “fees” they usually charge.
Any personal experience or knowledgeable advice would be appreciated.
My gut response: If you can’t afford the taxes, how will you be able to pay the loan?
I’m guessing that this company is your basic scummy “Homeowner Loan” company - the papers you sign give them a mortgage interest in the real estate. And, I strongly suspect, they know exactly how to foreclose on that interest.
Until you have a way to make payments, you may as well let the County foreclose - that way you don’t have the sleazebag’s “Loan Originating Fees” being deducted from the proceeds.
Can you rent this out for enough to pay the taxes? Airbnb some part of the place?
All you are doing is delaying the foreclosure - and that delay will be very, very expensive.
The only place I’ve seen that pitch are hand-written signs on busy streets. Similar signs promise to buy “ugly” houses and to get you current on mortgage payments.
To my knowledge, they acquire legal ownership of the house (paying off the property tax and the mortgage in the process) and then do a rent-to-own deal so that you stay in the house with the promise that you’ll regain ownership someday.
In practice, it’s a very predatory process. You agree to a higher-than-normal rent payment on the idea that part of the payment is a down payment on the house, but the contract will be worded in a way that this deposit is forfeited if you fall behind, get evicted, pay late, etc.
Plus, there’s no guarantee you get a fair price for your house. After all, you think that you’ll be buying it back, so you don’t even think of it as a permanent sale.
It is all a big loanshark scam meant to steal your house, run away and look into the natural property tax exemptions and deferrals that the Texas government gives you (you must actively sign up and send in paperwork though.) Here is some general information http://www.debtsurvivalinfo.com/?p=1406
And here is the Texas comptroller’s page on property tax exemptions that has further PDF information and resources
So fill out the forms and get on the phone with the relevant people to start the ball rolling. At worst, the government is guaranteed to give you much lower interest rates over a longer time for a deferred over-time repayment than any for-profit loan business ever would.
I found the answers helpful, although no one seem to have any actual experience with the businesses in question.
I don’t think the businesses are quite as shady as people seemed to think, but I have no real proof. They are quite prevalent, and I think they just offer an alternative to borrowing against your house and property to pay the axes, as opposed to, say, a standard bank loan.
I consulted with an accountant/lawyer about my situation, and he said that the best bet was to contact the tax office directly because they offered a deferred payment plan themselves that would put a hold on the legal proceedings. It is a short term plan, and will be hard to manage, but it gives me the time I need to get the funds together that I need.
Nearly always the right thing to to, or at least start with. Tax offices want your (mostly due) money, not your land. There are often many layers of process that will work as much for you as for them.
Every other player in the game, kindly, helpful tax-paying firms included, are after as much as they can get from you, ethically or not. They aren’t in the game to make trivial interest on highly risky loans.
Your real proof may come when the “business” takes your home because of some small hidden detail.
My wife worked in a tax office (in Texas) for a number of years. She said that setting up a payment plan is probably your best option. The tax authority (the county where you live) does not want your property. They “own” too many properties already and do not want all the hassle of referring it to their attorneys and going through all the foreclosure procedure in order to auction it off. All they want is money. If you show up in person, speak with a representative, explaining your situation and your willingness to pay when you can, it benefits everyone for them to cooperate. Of course, attitude makes a difference.
Not Texas, and city income tax rather than property tax issue, but writing a apologetic and polite letter to the tax commissioner got him to remove interest and penalties, leaving me with only the taxes I was behind.
Something to consider, in his reply, he said the he was in the business of collecting taxes, not interest and penalties. Saved me a pretty big bundle.
and another thing… While you are meeting with the tax guy/girl make sure you have all the exemptions in place you are entitled to. Homestead, over 65 (if applicable), disabled veteran, ag exemption (if applicable), etc, etc.
Sounds like common sense but you would be surprised at the number of people who do not have these exemptions in place simply because they have never applied for them.
Also, come right out and ask if it is possible to remove or somehow reduce the penalties and/or interest. Maybe they could at least defer them until a certain time when you can pay it off. I doubt they will offer this unless you ask. Might work, might not, but attitude is everything.