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Real Estate Taxes (cont’d)

Friday, February 14th, 2020

Big business – trying to become overwhelmingly bigger – have shown that they will rip off the American public. Sadly, they will do this in partnership with other institutions other financial, governmental and private institutions.

We have spent months looking into real estate taxes and the results make you realize how slanted to “the rich get richer” is this process of banks “escrowing” your taxes.. The end of that little ditty is “the rich get richer and the poor get poorer.” Problem with that is the poor are marketed to in ways to make them believe they are really doing very well, especially as compared to the poor in other countries. In fact, the machinery – the mechanism by which the rich get richer comes from the hard work and back breaking life lived by the poor. All the penny pinching most folks do would not have to be done if these little things in life were changed so the money of the middle class and the poor is kept by them and not “given” to those in the upper stratosphere of wealth.

Real estate taxes is a biggy.

The reason banks have become bullies and push people around as badly as they do can be traced directly back to real estate taxes. A mechanism used to make sure banks can use tens of billions of dollars of poor to middle class folks money to do whatever they choose and the banks and some other financial institutions benefit grandly because they pay nothing for the use of that money. Some of the money squandered by financial institutions in this last “fall out” came from your giving your real estate taxes to banks to use as they please – for free. They were way too wealthy to be careful – why should they, it wasn’t their hard-earned money. It was majorly your money given to banks to do with as they please returning nothing to you. We have not been able to find one bank that would give us anything “for free”. Everything banks offer comes with a high price tag to those to whom their “largesse” is offered. Some of the things they claim are “free” are the things which come with the highest price tags.

How does this happen?

When you take out a mortgage you are asked to escrow your real estate taxes – in other words – the bank will add a monthly charge to your mortgage-plus-interest due each month for the purpose of collecting and keeping your real estate taxes until they pay the city or other government entity which has determined that is what you owe. You make your payments to the bank monthly, they make their payments to the city every six months. Divide what you owe the governmental institution that collects real estate taxes into twelve and that is added to your monthly mortgage total. Just think of how you could live if you had that deal with the public. What a fantastic hedge fund you could create or other such investment vehicle – or you could just squander it all on nothing.

In addition, banks have other ways to force the issue.

One cute way is to wait until after the mortgage closes – with nothing said to you about real estate taxes and then the bank will surprise you when you receive statements including, adding in, additions to your mortgage. That would be mortgage-plus interest – plus 1/12th your real estate tax bill. Complain and several possibilities come into play – you are told ‘if you show us you can handle the two bills then in three to six months you can pay your own real estate taxes.’ Until then you have to pay your real estate taxes to us each month in addition to your mortgage plus interest. What do you get from the bank in return? An amount of interest equivalent to what you would receive if you had that money in a savings account, stock account, other account you may have? – not on your life. You get nothing.

But – you were investigated and went through a whole process during which the bank determined you qualified for the mortgage. They look at your income compared to the expenses you will incur with your new mortgage so you already qualified and should not have to “prove” anything.

Another thing said to people – Sorry, we must have had a misunderstanding. We escrow real estate taxes for everyone. You are not an exception. We did talk about that with you – no they didn’t – and, they then claim, ” you must not have understood.”

Why do banks play these games?

It brings them billions of dollars into the bank for their use – free. It is what allows them to bully you and the rest of the world in other ways.

We urge you to pay your own real estate taxes. Do whatever you have to do so you control the payment of those real estate taxes.

How do they work with real estate taxes in other ways?

Your city or whatever agency set real estate taxes in place, determines how much you pay for real estate taxes. They also put in place ways to help those who are having problems so they don’t loose their homes. They pass such through their City Council or other relevant agency and the bank counters and makes sure that is in name only – not a reality anyone can actually use when they need that kind of help.

One way many cities are working to help the elderly stay in their homes is by allowing people who are 65 or 75, or whatever age the city determines, to be able to apply to have their taxes deferred. There are also tax deferrals given to citizens, not yet at the required age for the elderly, based on other needs. You accumulate interest on the amounts deferred and when you die or sell the house the city is repaid including interest and the elderly person has had some breathing room and has been able to make decisions they could not make otherwise. One very large decision is that such a policy allows the elderly and others to stay in their homes. That also lifts some major expenses from the city which otherwise would probably have to subsidize housing for people in these situations were this not possible.

At least that is how it is supposed to work – in theory.

In actual fact, it does not work like that. We contacted several cities and discovered they had practically no elderly people with deferred real estate taxes. Why? Because the banks decided they would not go along with such a program and denied the person the right the city granted. Since cities have written an ‘escape’ clause into such programs – the bank power is what determines if those programs are viable or not.

The escape clauses, which are 100% active in such programs, says you can defer your taxes if your bank agrees to such a deferral – and they know full well when they come through with such a statement the bank will not agree to the deferral no matter how much equity an elderly person has in their home. – It is clear this is a game and not a real attempt to help the elderly and others bridge a time of life when they need such help.

There are many such ways games are being played while the city looks good to its elderly citizens and passes the buck to the bank. Banks are happy to go along with that program. They receive billions for their effort.

What to do: To pay your real estate taxes you have many options, especially if you need to put money aside monthly so you will have what you need when the time comes to pay the taxes. You can open a stock account with one of the online brokerage firms and put the amount into that account. Put so much in each month – or every other month – whichever best suits your finances. You can open a savings account, with a bank or credit union or, and put in whatever you need over a monthly or bi-monthly or what works best for you based on the time interval over which you receive your income. With an online brokerage, a savings account, a credit union account or whatever you choose, you can send your taxes to the city electronically or you can transfer the money to your checking account and pay the city by check. You have untold options on how to handle this.

Even if it turns out you will not make huge amounts of money – at least it is your money and you are receiving whatever earnings come from the use of your money. When you control your money you have a kind of power that helps to keep you financially viable in this society.

You need to always keep tight control of your money. Do not let anyone automatically transfer money from your account. At some point that will go against you and you will feel the helplessness of not being able to do anything about whatever is being done to you and such things happen lots – by accident – on purpose – by theft.

Laws are not going to mitigate what the banks are doing. You need to do that by paying your real estate taxes to the entity which determined you have to pay so much to them to own a house. There are problems with that, but this blog is focused on you controlling your money and paying to the entities you need to pay to when you need to pay to them and not otherwise allowing other institutions to come in, take over your money, use it for free for whatever they so choose and leave you minus what you could have if you kept control of those functions.

If you have comments, questions, etc. please feel free to email us at bettina-network@comcast.net

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Want to join us? Have a home that you want to open to become one of Bettina Network’s Hedge Schools? Call us and lets talk – or email us.

Ed. Note: Members of the Bettina Network Lifestyle Community can contribute to the Bettina Network Blog whenever they have anything they want to say and be heard by this fantastic group of people. Send your blog to bettinanetwork@comcast.net or mail it to us at P. O. Box 380585 Cambridge, MA. 02238 or call us on the telephone at 617-497-9166 to tell us what you want to say and we will write it for you.

Volunteer with Bettina Network Foundation, inc. to work estate sales; to help move items from one home to another; to contribute your ideas on how we can better use our resources in this effort to relieve and eliminate homelessness and poverty. We also need photographers; designers; and more. However much or little time you have, we are grateful.

Send your event information to be included in Bettina Network’s Menu of Events to: bettina-network@comcast.net

This is a curated blog so you cannot write your responses at the end of each entry. TO RESPOND TO THIS BLOG email bettina-network@comcast.net 




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Homelessness – What Causes It?

Friday, January 4th, 2019

We have been studying this for years.  I can remember a time when there didn’t seem to be homelessness.  At least it was so carefully hidden most of us were not aware of anything except the romantic tale of the hobo who couldn’t live in a house – did not want to be closed in, but spent his life riding the freight trains from one place to another.  Little did we know that was real, except for the part about the hobo not wanting to live in a house and wanting to spend his life riding freight trains, cooking over fires he made from whatever he could gather that would burn, freezing to death along the railroad tracks, etc.  He was pictured in movies and other media as a happy camper living this life. There was usually happy music in the background when talking about such.

That was and is an extremely painful way to live and not one lived that way by choice.  What was also carefully hidden from John and Jane Q. Public was the fact that the hobo was the hobo he and some were the hobo she.    

I have always asked – why would a seemingly wealthy society allow such within its borders?  I have no answer.

Homelessness is caused by banks.  Oh, Wow!  I can hear the screams, objections and denials.  You can hem and haw.  You can object and protest.  When you sit down, clear your head and do the work and the investigation you will discover HOMELESSNESS IS INDEED CAUSED BY BANKS.

Within the bank, accountants and others sit and get paid to figure out ways banks can make more money at the expense of the middle class.  Sometimes banks hire consultants – usually outside accountants to do the same thing. “How can we charge for  services we don’t render.  How can we increase what we make on services we do render.”

Well lets take this one profit making pocket at a time.   What is the number one way banks cause homelessness?  House foreclosures.  How does that make so much money for banks?  

The fastest way banks cause homelessness and increase their profits exponentially in the process is through their ability to collect the real estate taxes (RET) levied on John and Jane Q. Public, by the government.  

Cities and other governmental entities are supposed to levy and collect their own real estate taxes.  In fact, that has been turned over to banks to do and it is done by banks in such a way that hundreds of billions of dollars flow into banks from this function.  Bank charges to city entities; fees of all kind levied on home owners for many reasons, etc. It is one of the reasons we have such huge banks and why it is difficult to impossible for the smaller banks to grow at the rapid rate seen in the larger banks.  

If you take out a mortgage with a bank – you most likely have to agree to paying your real estate taxes directly to them instead of to the city or other governmental entity.  Those RET are kept within the bank for at least six months doing nothing except making money and being used by the bank.  That is an amount of money the bank can “bank” on receiving and when and know it will be received with regularity and they know how long it will be in the bank.   From that they can plan how to use that money to increase their profits exponentially because you can’t come to withdraw any of that money, it has to stay put for the requisite period of time and when it has to be turned over it will have been a work horse for the time it stayed.  But – you should say – that money should be a work horse for the governmental entity to which the real estate taxes are owed.  

Look at how much better that money would work for you and me instead of being used to work against you and me keeping us poor or with a glass money ceiling over our heads. How did this happen?

This is one answer to the question – “How did banks grow so big!”  How come they have so much money!  Why are they so arrogant, independent, can be ugly to their own customers and still grow and stay in business. How can they throw so much money around (not the least of which is throwing it around political campaigns to keep the politicians beholden to them). This is one of the ways banks have grown so very large and are awash in hundreds of billions of dollars and it is a biggie.  It is also one of the ways banks promote foreclosure. – It is one of the ways they become the largest promoter of homelessness in this society.

 Homelessness is not about mental institutions which put its patients out on the street for lack of money to sustain, treat and cure them where possible? That is the marketing/advertising campaigns that are out there to mislead us all.  NO! Susie.  It is not.  That is and was a smoke screen.  Homelessness can be traced directly back to banks as its beginnings and root cause.  And, banks are a causer of homelessness dates back beyond the founding of these United States.  Banks have had this role for eons of time.

There is no reason for banks to collect real estate taxes on houses.  The taxes have work to do taking care of different needs of the people who pay the taxes.  If your real estate taxes must sit for six months in a bank – having been paid some six months before they are due so the bank can have that bit of huge money inflow to help it grow ‘big time’, that is a ‘big time’ problem for the people for whom those funds should be working.

The money paid to banks far in advance of when the city says they are due should actually be working to gain more income for you or for the city – if indeed it is not obscene and a violation of your rights to make such a requirement.  In fact, almost all of the real estate monies are collected in this country by banks; sit in the bank working very hard for the bank; and earning untold billions to help grow that banks strength and reach into the community.

Many games are played around real estate taxes and banks.  We, the tax payer,  assumes the present system is the way it should be and we go along with the program – much to our detriment.  We make that assumption because we don’t think of ourselves and our rights. We accept what is, if it is dressed up in Patrician clothes and exhibits the mores of a Patrician class.

Banks collect RET (Real Estate Taxes) on a monthly basis from people who acquire mortgages from them.  The people must then repay the mortgage, usually monthly,  along with 1/12 of that years real estate taxes each and every month.  The bank keeps that money and uses it because real estate taxes are usually only paid by the bank to the city every six months.  The average mortgage holder much pay their real estate taxes monthly and six months in advance of their being due. 

This is an inviolable thing.  No one questions it – and it goes so unquestioned that banks can foreclose and they do foreclose on homes and families even if the mortgage is paid in full each month.  If the real estate taxes are not paid six months in advance the foreclosure happens – not by the city because it does not see taxes owed by citizens and does not foreclose if a citizen misses one six month period of paying taxes, but the bank does this on a regular basis.  Claiming a person is behind in their mortgage even though that is not true and even though the taxes – which they are behind in paying – are taxes, amounts of money, not due for another month or two.

To put that in its proper context. Banks make substantial sums of money on funds that stay in the bank overnight. And they maximize that in every way possible. These are funds that stay in the bank for six months, definite, not able to be withdrawn, tied up in the bank no matter what. Imagine the money made on that. The bank pays a very small amount of “interest” to the mortgage holder on their “escrowed real estate taxes” – minuscule to the amount it is making on those funds.

When that happens – add a little push to get the family headed into financial problems which results in the house being foreclosed, and banks have been known to do this frequently.  Add a minority to whom the bank has given a mortgage; add a minority who has somehow skipped past the banks red-lining policy; add to that a property which has a very small mortgage compared to the large equity position of the property owner – no matter the race, color, class, ethnic origin, religion of the property owner and, in a bank with lousy ethics which is or is bordering on becoming a criminal enterprise, another game usually moves hand in glove with the real estate taxes game.

Banks have been known to target families where there is a large gap between the value of the house and the balance of the mortgage.  When a person has a small mortgage and a large equity position they are sitting ducks for a bank to salivate over future profits.

That was out of control during the last recession and banks were so overcome running where their greed pushed them that our banking system almost collapsed.  Their greed overcame their ability to function any other way.  Many bankers and realtors became wealthy with such a scheme – one amongst many.  Many individuals faced poverty, bankruptcy, homelessness – especially homelessness.

 More on this story in another blog.  Maybe even a few real life stories!

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Learn More About How We Use Your Donation!

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Project 1 – Estate Sales after the Sale

Project 2 – Wells Fargo Boycott

__________________________________________________________

Want to join us? Have a home that you want to open to become one of Bettina Network’s Hedge Schools? Call us and lets talk – or email us.

Ed. Note: Members of the Bettina Network Lifestyle Community can contribute to the Bettina Network Blog whenever they have anything they want to say and be heard by this fantastic group of people. Send your blog to bettinanetwork@comcast.net or mail it to us at P. O. Box 380585 Cambridge, MA. 02238 or call us on the telephone at 617-497-9166 to tell us what you want to say and we will write it for you.

Volunteer with Bettina Network Foundation, inc. to work estate sales; to help move items from one home to another; to contribute your ideas on how we can better use our resources in this effort to relieve and eliminate homelessness and poverty. We also need photographers; designers; and more. However much or little time you have, we are grateful.

Send your event information to be included in Bettina Network’s Menu of Events to: bettina-network@comcast.net

This is a curated blog so you cannot write your responses at the end of each entry. TO RESPOND TO THIS BLOG email bettina-network@comcast.net or info@bettina-network.com

TO LEARN MORE try www.bettina-network.com

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Posted in #Wells Fargo Boycott, #WELLSFARGOBOYCOTT, Banks, Bettina Network Educational Institute, Breakfast Table Talk, Finance, Foreclosures, Hedge Schools, Homelessness, Mortgages, racism, Real Estate Taxes, sexism, Wells Fargo, Wells Fargo Boycott | Comments Off on Homelessness – What Causes It?

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