New Jersey property owners abused by tax abatements

Two columns in the Asbury Park Press this past week highlight the use of real estate tax abatements to attract development.  Both columns point out that ordinary tax payers take a beating when abatements are granted because school taxes are impacted when abatements are granted.

The first column is Sunday’s editorial.

"A report issued last week by the state Comptroller's Office spotlighted the practice of municipalities from Hoboken to Millville giving out tax breaks involving "hundreds of millions of dollars" on property worth billions of dollars statewide.”

 “It also recommended a number of steps the state should take to ensure the tax breaks are benefiting the average citizen, not developers and their political friends.”

School districts are hurt the most when abatements are given since the property being developed does not pay school taxes.  Thus, in the words of the editorial,

 “[W]hen a developer gets a huge tax break, it does not mean a municipality's tax demands are correspondingly reduced. Other property taxpayers make up the difference. That's not fair.”

Columnist Bob Ingle also goes after tax abatements.  Picking up the editorial’s theme, he writes,

“Abatements can make the situation worse for the already over-burdened property tax payers. Consider: A municipality gives an abatement to a widget factory which hires 30 people. The town arranges for payments in lieu of taxes. School districts receive no part of those payments, but the 30 workers bring an additional 90 kids to the school district, which has to expand at additional costs to the property tax payers and state aid from Trenton.”

How about this case?

“In South Jersey, Gloucester Township in a six-month period handed out three short-term abatements to Wawa stories expanding to Super Wawas. The three are within two to four miles of each other. Why should property tax payers have to underwrite the expansion of Wawa stores? The company is big and wealthy and probably would have expanded the stores anyway.”

Well, this does seem unfair.  What do you think?

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow

Vested Title Inc.

648 Newark Avenue, P.O. Box 6453,

Jersey City, NJ 07306

Tel 201-656-9220 - Fax 201-656-4506

E-mail vti AT vested.com - www.vested.com

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Mortgage program a bust with 50% dropout rate?

We have previously written about the Obama Administration’s program to encourage mortgage modifications.  Well, the news is in and it’s not good.

According to the Associated Press,

“Nearly half of the 1.3 million homeowners who enrolled in the Obama administration's flagship mortgage-relief program have fallen out.

“The program is intended to help those at risk of foreclosure by lowering their monthly mortgage payments. Friday's report from the Treasury Department suggests the $75 billion government effort is failing to slow the tide of foreclosures in the United States, economists say.”

 “Approximately 630,000 people who had tried to get their monthly mortgage payments lowered through the government program have been cut loose through July, according to the Treasury report. That's about 48 percent of  those who had enrolled since March 2009. And it is up from more than 40 percent through June.”

 Who is to blame?

“Many borrowers have complained that the government program is a bureaucratic nightmare. They say banks often lose their documents and then claim borrowers did not send back the necessary paperwork.

“The banking industry said borrowers weren't sending back their paperwork. They also have accused the Obama administration of initially pressuring them to sign up borrowers without insisting first on proof of their income. When banks later moved to collect the information, many troubled homeowners were disqualified or dropped out.”

 One thing is clear—we are facing more foreclosures.

Read the full report.

 

For your next title order or 

if you have questions about what you see here, contact 

Stephen M. Flatow 

Vested Title Inc. 

648 Newark Avenue, P.O. Box 6453, 

Jersey City, NJ 07306 

Tel 201-656-9220 - Fax 201-656-4506 

E-mail vti@vested.com - www.vested.com

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Is the FDIC letting the foxes get a second chance at the hen house?

From the Associated Press:

“The Federal Deposit Insurance Corp. took over ShoreBank, with $2.16 billion in assets and $1.54 billion in deposits. Urban Partnership Bank, the newly chartered financial institution, agreed to assume ShoreBank's deposits and nearly all its assets.”

ShoreBank was shut down by the FDIC on Friday.  It was long expected.  According to the Associated Press, the bank

“has been known for its social activism but racked by financial troubles in recent months. A consortium funded by several of the biggest U.S. financial firms is buying its assets and pledging to operate the new bank by the same principles.”

So, what’s so strange about this turn of events? 

In an unusual move, the FDIC allowed some of ShoreBank's executives to continue running the restructured bank. Executives who joined ShoreBank recently, as the bank struggled to raise capital, will manage Urban Partnership Bank. These managers "did not contribute to the bank's problems," the FDIC said.

Well, we’ll see if the FDIC is right about that or if this is just another case of insiders getting a second chance at the gold.

Read the full story here.

For your next title order or

if you have questions about what you see here, contact

Stephen M. Flatow

Vested Title Inc.

648 Newark Avenue, P.O. Box 6453,

Jersey City, NJ 07306

Tel 201-656-9220 - Fax 201-656-4506

E-mail vti@vested.com - www.vested.com

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 OK, you've just bought a house or taken out a new mortgage.  In front of you is a stack of paper.  What do you do with that pile?  Well, an article by Carla Hill on Realty Times, Paperwork to Keep After Closing, is a concise guide to doing just that and is worthwhile to post in its entirety.

At the end of closing, a large stack of papers sits in front of you. How do you know which ones to file away for future use?

To make your job of sorting through the papers a little easier, here are a few "be sure to save" items.

1. Truth in Lending statement: This handy paperwork helps to summarize the details of your mortgage, including your percentage rate.

2. Insurance: Not only does it serve for proof of coverage, but just in the case you need to make a claim, you will have contact and coverage information on hand.

3. Deed: This paperwork proves that the property has "indeed" been transferred to your ownership.

4. Riders: These are sale contract changes (amendments) that affect you directly.

5. HUD-1 Settlement Statement: This is a great itemized list of your closing costs. It will be especially important for when it comes time to pay income taxes.

Be sure to keep all of your paperwork in an organized filing system and in a fire-proof safe. For a more in depth list of items to keep, be sure to ask your lender and real estate agent.

For your next title order or

if you have questions about what you see here, contact 

Stephen M. Flatow 

Vested Title Inc.

vti@vested.com - www.vested.com

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Calling all credit card users- New credit card rules begin

By the time you are reading this, rules for credit cards will have changed. “Newly purchased gift cards won't expire as quickly, and late fees on credit card payments won't be as punishing."

“The final stage of consumer protections signed into law this year go into effect Sunday. Yet they only curb select practices; other fees and charges still abound.”

Here are some of the new safeguards, but remember, you can still get burned.

Penalty fees:

New protection:

Fees for late payments and other transgressions will be capped to the amount of the violation, up to $25. And, a single violation can no longer result in more than one fee.

Gaps to watch: Technically, there isn't an outright ban on penalty fees higher than $25.

“There aren't any caps on other charges. And not surprisingly, many issuers hiked fees for balance transfers, foreign transactions and cash advances in the past year.”

Rate hikes:
New protection:

“Banks must review a rate hike every six months to decide whether the increase is still warranted. If the factors that prompted the hike are no longer applicable, the rate must be lowered.”

This rule applies to hikes dating to Jan. 1 of last year, when banks began raising rates in anticipation of the new regulations.

Gaps to watch: 

“Even if a bank finds that a rate should be lowered, the reduction doesn't have to restore the previous interest rate.”

Gift cards:

Expiration dates

New protection:

“Gift cards issued after Aug. 22 must have expiration dates that are at least five years from their date of purchase.”

Gap to watch:

“The rule doesn't apply to certain gift cards, such as those issued as part of a rewards or loyalty program.”

Inactivity and service fees:

New protection:

“Such fees can only be charged if the card hasn't been used for at least one year. After that, only one fee can be charged each month.”

Gaps to watch:

“There's no cap on inactivity or service fees. So even though you can only be assessed one monthly fee, it could quickly eat away at a card's value if it's not used.”

It's a first step, some one say a small one, others a big one, in giving consumers more protection.  Let's see what Congress does next.

Read the Associated Press article.

For your next title order or 

if you have questions about what you see here, contact 

Stephen M. Flatow 

Vested Title Inc. 

648 Newark Avenue, P.O. Box 6453, 

Jersey City, NJ 07306 

Tel 201-656-9220 - Fax 201-656-4506 

E-mail vti@vested.com - www.vested.com

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