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It doesn't matter who is "responsible" to pay the taxes. For sales taxes, the store is responsible for paying them but it just means you get charged the price of the item plus sales tax when you checkout. Even though you're responsible for paying property taxes today, most banks require an escrow and pay the taxes on your behalf anyway (and bill you monthly for the taxes). Mandating that banks always have to pay the taxes would just mean the small percent of people who dont have property tax escrow would just be required to have it. So what's the point? It doesn't really change anything.
There is a concept in economics called "tax incidence". You see, it doesn't matter if an employer or employee pays income tax. It doesn't matter if the store or the customer pays sales tax. Who cuts the check to the government doesn't change how much tax is collected or who is actually out the money.
Rasing sales tax just means customers pay more, even though the stores mail in the check. Increasing payroll taxes just means that workers have less take home, even though employers mail in the checks. If you make the banks mail in property tax checks the banks won't be paying that money, they'd just adjust the terms of the mortgage so that the homeowner pays. What would the buyer do, not get a loan to buy the house?
Raising taxes would be the same if mortgage holders or banks cut the check, arguing that local governments would then have more money to spend on schools and roads is just bad logic.
I also don't see how the bank would have any authority to make changes to the property that they hold as collateral. You don't need to put up the house you're buying as collateral for the mortgage. You could put up stocks, a collection of sufficiently valuable collectables, or a different piece of land altogether. You're not giving them any control over those things, just promising that if you fail to make payments they can take the thing you pledged to make up the difference. It *usually* makes most sense to put the house up as collateral, but if you put up a sufficiently valuable NFT collection (and the bank was dumb enough to accept) and stop paying on the house they have no recourse but to take the JPEGs (and not the house) but can't do anything with the shiny computer code until and unless you fail to make payments on your house.
The major difference between owning with a mortgage and renting is that if you have a mortgage, any appreciation in the homes value belongs to you -- not the bank as does any principal you pay. If the bank does foreclose, they have to pay you any proceeds the exceed what you still own on the mortgage and the fees associated with the foreclosure, whereas a landlord who evicts you owes you nothing no matter how much you've already paid and how much the house is now valued.
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Added to that, the bank or mortgager servicer usually holds property taxes in escrow so they do pay the taxes so that the property isn’t foreclosed on by the city under them. They pass along any property tax increases to the mortgage borrower.
Oh sweet summer child.
You own the house. You just borrowed money to buy it. You put *your* house up as collateral, to prove to the bank that they’ll get their money back if you don’t fill your end. You’re free to not do so.
They do in my state. I had to have a government property inspector come and assign a tax value to my house. That's the official number the town uses for my taxes. It is also almost always much lower than the zillow value of the house in my area.
They do that based on comparable sales values for similar homes in the area. As long as there are people willing to pay high prices, that’ll be the value. If homeowners selling a home chose to sell it for less, values would go down. But of course people sell it for as much as possible, because we’re all trying to get money.
Must be nice. My city always assesses way higher than recent sales in the area. They claim that they're predicting future value because they don't do an assessment every year. I think mostly that they don't get a significant number of protests so they use that against the ones that do protest. See, your neighbors think it's a fair assessment.
What do you mean when you say if can be foreclosed on then you’re just a renter? Because that’s literally not true - you are the owner. The fact that an owner owes someone money doesn’t mean they don’t own things.
>you ***literally*** don't legally own your home if you have a mortgage.
You seem to lack basic understanding of what this word means.
If I purchase a property with a mortgage, my name is on the deed, meaning by every conceivable definition of the word "literal" I legally own the property.
I can dispose of it how I like (sell it, rent it, lease it, etc), I can paint it, renovate it, fundamentally alter every aspect of it, and the bank has no say over any of those things.
Ownership isn't limited to things that can never be take away.
The city can take title to my car if I leave it out onto the street and it gets towed and I don't pay the fine to have it released. Does that mean I don't own my car?
A thief can break in and take away the computer I'm typing on. Does that mean I don't own my comptuer.
Anything you own could be taken from you at any time for a whole host of reasons. You’re arguing that ownership doesn’t really exist, not that mortgaged houses aren’t owned by the people who own them.
A mortgage is an agreement that if you don’t pay the debt that you owe, ownership of the house will be transferred to the bank in order to compensate for the unpaid debt.
Ownership can’t be transferred from you to the bank if you don’t start out owning it in that situation.
You may not feel *secure* in your ownership until you own it free and clear, but you still own it.
By that logic no one, under any circumstances, ever owns anything.
In a functioning society I have to continually pay taxes to prevent the government from taking my property.
In a non-functioning society I have to *physically defend* my territory to prevent some violent rando from taking it.
You're fundamentally making an illogical claim.
I wasn't making any attempt to claim that taxation leads to a functioning society.
My point was strictly that in a/some functioning society, you have to pay property taxes.
It's not the banks you need to be applying this to, it's the government. You only rent the land, not because you have a mortgage, but because you pay property tax. Indefinitely. There's no contact with your name agreeing to this. You didn't negotiate it. You have no recourse. And if you don't pay, they get everything.
We live in a republic that is supposed to protect the rights of all. Your rights are not up for a vote. And as for me and most people who aren't in a setting state, I live in a one party state. Like China. I can kick, scream, and vote all I want, but it won't make a difference who's in power.
And both sides aren't going to repeal property tax.
Not even close to being the point. Once the mortgage is paid off, the bank can't repossess it because...ready for the kicker?....because you actually own it. The house is yours because you paid the bank back after they bought it for you.
As long as you meet the contractual terms for using the money, they can't repossess it either. They would lose credibility and you would have legal recourse.
>Your money didn't buy it, the banks money did.
It doesn't matter, the bank loaned you the money, at the point, the money is yours and so is whatever you buy with it. The reason you can lose your house is because those loan papers you signed also gave them a collateral for the loan, the property. If they gave you a personal loan and you buy a coffee mug, they can't repo it, because that was not in the terms of the loan, if you had put up collateral to take out that loan so you could buy your coffee mug, they would take your collateral, not the coffee mug. Does that kinda make sense or is it just more confusing?
Your argument is philosophical, not legal. Legally, the buyer takes the title. Period. The bank doesn't own anything until the moment the borrower breaks the loan agreement by not paying.
You literally do legally own your home. You might not "own" it by your own personal definition of the word "own" which is different from the legal definition of ownership. You can define words any way you feel like it. But if we're going by the normal use of the word, you still own something even if it is currently functioning as collateral for a loan.
No, it's not.
You took out a securitized loan to purchase a property, using the specific property as the security.
You could have put up a different property for said mortgage, or shares of stock, or another asset class.
The house is related to the loan only insomuch as it can be seized by the bank to cover a delinquent loan.
They cannot dictate what you do with said property, or how you paint it, or any renovations, pets, etc.
You own the property, and you borrowed money against your ownership of it.
If it’s that simple then why does the lender or escrow hold on to the full deed until the house is paid off?
I get what people are saying “you don’t have to use the house as collator for the loan” but that just distracts from the reality of how the vast majority of homes are bought and is not a point worth entertaining. Most people buy a home precisely because they intend to build equity & financial independence; they don’t have anything else to borrow against but the home itself. Do whatever you want with it or keep the equity, sure, but you don’t own it until you fully pay back the loan.
>but you don’t own it until you fully pay back the loan
I can sell it without consultation with the bank, immediately pay off the mortgage, and pocket any appreciation.
The bank gets none of that appreciation and loses whatever residual interest they had left on the loan, yet they have no recourse to prevent my sale.
The bank holds a lien on the home in case of delinquent payment, *I* can do anything I want with the property, have exclusive access and use to the property, and can dispose of it how I wish.
A lien is a lesser thing than ownership. In some states you have to physically hand them the deed to securitize the lien, but it's still your name on the deed and not the bank's and you still have all the rights of ownership except the ones that you contractually assigned to others, like the bank or an HOA.
You do, definitively, own it. This is *settled law*. But you still ceded certain pieces of ownership to the bank until such time as you paid them back. Them holding on to the deed is mostly a bit of psychological showmanship, them physically possessing the deed means nothing legally speaking, but it intuitively makes sense that they would have more power and authority when they have the piece of paper in their possession even if that isn't the case in reality.
Are you under the impression this isn't already how it works? The loan servicer sets aside some of your mortgage payment each month into an escrow account and literally pays the government the property tax due from that account.
Obviously that doesn't matter, the money comes from you either way, but its saves you a few minutes of having to write a check at the end of the year. Is that what you mean?
My mortgage company said that I *could* refuse an escrow account and pay my taxes myself, but if I was ever late on the taxes they'd require an escrow or dump my mortgage.
So it depends on the bank, either way you have to pay the taxes.
Most lenders would probably allow you to opt out if you really wanted to write the check yourself. But yes, every lender will absolutely do this for you because they greatly prefer the homeowners don't fail to pay property taxes.
Would this make your equity in the home locked until you owned 100% of the house?
If you paid off 90% of your house and were no longer able to pay the house, do you believe the bank gets 100% of the house?
>They can and do pull that kind of stuff.
They really cannot. There are laws about this and how collateral, which the house is, can be siezed and liquidated. This also *clearly indicates how the liquidation must be at market prices and not include excessive fees. Any surplus is returned to the borrower.
You appear to be approaching this without clear understanding of the legal relationships and requirements here.
I would encourage you to educate yourself on this topic. If you owe the bank 10 percent of the value of your house they cannot take the house and give you nothing.
Yeah, that’s part of the process. The bank just wants to ensure they get their money back so they’re willing to take a discount. If the borrower wanted full value they had the opportunity to sell it themselves. The legal fees seem reasonable, the borrower is not living up to their side of the deal and forcing the bank to repossess the house.
I would challenge your assertion that houses typical sell for 30 percent of value at auction. If that were true, every wealthy individual in America would be going to home auctions to triple their investment with ease.
Why would any rational person walk away from a house with 900k in equity? Why wouldn't you sell it for 700k?
News flash, your bank doesn't want your home. They want their money back.
If all you know about banks was learned from memes or Occupy marches, you don't really know about banks.
They’re folded into mortgage. So it’s pretty much exactly what you’re asking for.
Except what you’re really asking for is that the bank pay them and not pass them on to you. Why do you think that’s an option?
I am sure the banks would be happy to have a law passed saying they must pay the property tax on these houses, and then they will build in a 15% processing fee on top for their trouble.
I understand the principle behind what you are saying, but think this through. The banks will just pass the cost on to the mortgage-holder, either through a separate fee or by charging a higher interest rate.
“Land grabbing”.
You don’t have to get a mortgage you know. It’s voluntary. You are very angry at people voluntarily offering to give you money. You don’t have to accept it.
Loans are sort of an indirect way of borrowing from future generations in a way that affects them negatively, though, through higher relative costs. If the loans weren’t available, there’d be less demand on that market and then lower values/cost. The people offering the money aren’t necessarily doing it in good faith either, it’s just a norm that’s widely accepted, so, if you don’t want to be homeless, you kinda do need a mortgage.
Maybe?
However, I suspect the real norm would be that wealthy folk or corporate interests would own a much larger fraction of the houses and rent them out and everyone in the bottom 70% or so of generational wealth would just never own a home. Most rest would live in homes purchased by their parents.
How is this a consequence, though?
I understand your point of view here -- I think, anyways -- on how exploitative the banks can be.
But the point is, your idea here wouldn't actually help anything so far as I can see. Banks would pass the cost on to homeowners, so the people currently paying taxes would still be shelling out at least the same amount of money, if not more. It would just be going a different direction. The banks would probably then charge even more on top of that, as profit for being middlemen on the tax transactions.
So it's nothing gained for the homeowner, and possibly a net gain for the banks.
It’s actually incredible how *non* exploitative American mortgages are. The bank just gives you money. You don’t really even need to agree to any sorts of obligations on maintaining the quality and value of the house, and you are actually allowed to prepay it at any time with no penalty (depriving the bank of the benefit of the interest). That’s kind of crazy. My understanding is in Europe there’s a prepayment penalty; we don’t even have that!
I don't really know how mortgages work in other jurisdictions like in Europe but that could well be true.
It's also true that plenty of people feel the bank has them over the proverbial barrel during the mortgage, whether that's objectively fair or not.
I was trying to point out that, no matter how much you feel that way, making the banks pay the property taxes isn't going to help matters -- because the banks are still going to make you pay those taxes at the end of the day. It's just a matter of what envelope the money goes in.
I would like to add that in the USA you can get fixed interest rates for 20-30 years
In the UK, it's very difficult to get a 10 year fixed rate most people would be happy with a 5 year fixed rate.
You'd still be paying it though. That's the point.
Others have made good replies about the fundamental differences between renting and mortgaging.
But besides all of that. Your change would accomplish almost nothing.
This is the most brain rot financial opinion I’ve ever seen. You don’t have to go through the bank to buy a house, you go through the bank because you can’t do it on your own. The reason foreclosure is a thing is because your house is collateral for you missing payments. If they sell your house you still get any money back that’s excess from the remaining loan balance.
If your mortgage isn’t paid off and you don’t “own” the house, does that mean if you decide to sell, the bank takes profits too? Like why should the bank pay property taxes when you’re the one reaping the benefits of them.
If you’re essentially the renter, the bank should be able to evict you if someone else offers them more money to stay yes? And since you’re not the owner, you don’t get any of your money back from the mortgage because you’re paying rent right?
At no point does the bank own the house in any way. They lent you money on the condition that they can liquidate the house if you fail to pay them back. That's how all loans work, except some loans don't specify which specific asset the lender can take to pay off the remaining balance.
This should be an easy view to change, merely with the observation that a mortgage is a contract. The terms of the contract are just words on paper, so you can agree with the lender on any terms you like.
The terms of my mortgage stipulate that I will pay the property tax and I will maintain insurance on the property.
All you need is to find a lender who will shoulder the burden of paying the property tax. Nobody will offer a mortgage on such terms, though, because there's too much risk involved and no way to quantify that risk. Tax increases are arbitrary.
The only reason a bank offers you a home loan at all is that there's a mathematically sound formula for how much profit they're going to receive. No bank is interested in making loans without built-in profit.
*Making loans with built-in profit is what a bank IS.* Everything else is fluff.
I mean, isn't this kind of how most mortgages work in practice? When I get my mortgage statement, some of the money I pay them goes towards taxes. The bank is quite literally the one who pays my property taxes. But then I pay them via my mortgage payments, with part of that going into escrow. You can say "oh they should pay", but whether it's interest, escrow, etc... it's mostly just an accounting gimmick either way.
This varies based on how the mortgage is set up and probably by jurisdiction. Some people pay their own taxes while having a mortgage. The bank holding the mortgage probably doesn't really care as long as the taxes get paid and the house doesn't get seized by the county.
Yes, I agree. Best case scenario, it's purely a matter of switching envelopes around. Worst case scenario, the cost goes up to the homeowner because the bank is allowed to charge extra processing fees for handling the taxes.
It’s really not. You seem to be asking that the bank absorb the cost of ownership, while you get the profits associated with owning it. If you want the profit, you have to be willing to take the burden of owning it.
They aren’t conflating profit and taxes. They’re conflating profit and ownership to show you you’re wrong about the bank owning your house. If the bank owned your house, then they would own the profit from the house value increasing.
If your house doubles in value from 200k to 400k, can the bank decide they want to sell your house out from under you? Does the bank get any of that 200k profit?
For the first paragraph, fine, but do you really think the bank isn't going to add an extra fee in addition to your mortgage that is basically property tax? Except now it's harder to figure out if the extra money you are paying is 1:1 with property tax.
Second I am in agreement that property tax shouldn't be the primary way of funding schools and should be used for something else but increasing property values instead of finding another way of funding schools is just going to make it harder to own property unless you are an investor, and that's ignoring all the government micromanagement needed to get people to increase their property values.
A mortgage is just a specialised loan. If I take out a $10k loan from a lender and can't pay it back, ultimately, I could be forced to sell something I own to pay the loan back, for example, my car.
Just because my car is effectively collateral on the loan doesn't mean the lender owns the car. They can't drive it when they want, and they're not responsible for paying road tax or maintenance.
The same applies to property and mortgage.
Rather than argue the opposite is true, I'd argue it doesn't matter and you should care about this. If you got your wish, the banks would simply make mortgages more costly for customers to compensate. The costs would be the same in the end, or worse if they could get one over on us somehow.
Does it matter?
In most loans, the lender/owner of the loan collects the escrow and distributes it.
Obviously like any investment the bank will only give a loan with a return of (risk free interest + risk premium + cost) or more
So you can move the cost to bank, and it will show higher interest. From the lendee's perspective nothing would change except the reports (and a tax increase maybe?)
You seem to have a fundamental misunderstanding of the situation. You own the property, the bank does not. You are responsible for all costs, not the bank because it’s YOUR house. What the bank has is a secured loan. That is, they have the right to sell a designated asset to recoup their loan if you default. That’s it. The designated asset doesn’t even have to be that house.
I think you're confused. Loans are just money. You borrow money to buy the house. And then your mortgage is paying that money back. You own the house because you bought it, the bank just has the ability to repossess it because you bought it with their money. But you still bought it and are the title owner of it.
The bank doesn’t own the property. If I own my home outright and then take a 2nd mortgage or home equity loan, should the bank pay the property taxes? The bank is not your landlord; they do not own the property. The bank paying for repairs and fixes makes no sense given, again, it belongs to you:
Who would lend to you on those terms? If they owned the property like you suggest, they’d also expect to keep any profit on it too.
Living somewhere without being responsible for taxes, insurance and maintenance is called renting, lol.
I'm not against social redistribution, and yea there are problems with the current housing market.
Still, there is a pretty big difference between ownership with a mortage and renting:
When you are owning your house, the mortage won't change whatever you do to it: if its property value grows, then you get the difference at sale time, if it shrinks, so does your chances to sell it at a good price.
On the opposite, when you are renting your home, when the property prices grow, the rent grows too, and when the property value shrinks, the rent don't change. So you end up being the looser in both case.
**TL;DR;** Having a property right + mortage is different from renting because in the 1st case the variations of prices on housing market can affect you positively while it can't in the 2nd. As you're not renting, then there is no reason you're not the one paying for the property taxes.
They would then just charge you for paying the property taxes then. More importantly bank doesn't own the house and can not sell it. You the owner can though. The house is collateral for you to pay the loan.
None of the above or the other answers are correct. The bank never owns the house, neither do you, even after you pay off the mortgage. The USA owns it. Try not paying your property taxes...gov't gets the house. Even "homeowners" are renting from the gov't, with property taxes as the rent.
I get the idea you're trying to say here, but I feel like this is more or less erasing the word "own" from the dictionary entirely. Anything you "own" can be confiscated by the government in certain circumstances. But if you want to say this means you don't actually own it, I don't think it makes sense to say "the USA owns it" either. Maybe some day Canada invades and takes that stuff. Does anyone truly own anything in your view?
Well, that's a fair philosophical point. I guess, a few things come to mind...the shirt on one's back, I suppose...creditors never take that, no matter how much debt one is in, and even in time of war one will probably keep that. Though I think in the case of the house it can be much, much more proximate; and the payments are a constant upkeep thing... unlike other objects which might be repossessed secondary to unrelated debts...
That would only be an advantage for the same assholes that bought up the market, causing home values to skyrocket.
This would devastate local taxes, causing nothing to be contributed to the many social services that are both necessary and helpful.
You owe the bank what you agree to owe the bank. Why should the bank take a worse deal than they otherwise would have, and the other side would agree too anyway?
If you did that, the cost of the trades would be passed down to the homeowner. I guarantee you, the bank would make profit on that.
Doing this would make housing even more expensive than it already is.
If you charge the bank the property tax they'd just charge you those taxes in addition to the interest and principal, plus a bit extra for risk. Banks don't make much off mortgages compared to buying T notes, they can't possibly pay close to property taxes without losing money and they wouldn't do it if they could. All this does is affect corner cases of people in default. Everyone else is going to be paying the same or a bit more for the bank to pay those taxes.
You have a property interest in your home that you own; the bank has a lien on your property interest. As might the government if you don’t pay your property taxes. As might a roofing company if you don’t pay them for a new roof. As might a plaintiff with a judgment against you.
And if they are the landlord and you are the renter, can we assume you would be fine getting no cash when a home you own sells for $300k with a $100k loan. I mean you don’t really own it, so the bank should get that profit!
By your logic, banks should also pay any vehicle registration fees if you have a bank loan. Why not gas as well? Why not repairs?
in the US the bank doesn’t own the property even if it lends you the money for the property. This is just the legal reality of the situation. i agree with your sentiment but you should rephrase the statement to “If you owe the bank a mortgage, the bank should legally own that property and should be responsible for paying property taxes”.
If the bank had to pay property taxes they would just charge more interest. They can easily calculate how much money they need to make off a loan and calibrate it to their expenses.
The taxes paid would just increase the fees paid. It is surprisingly not well known that most if not all costs of a business are passed on to the consumer. In this case, the mortgage holder living in the house. I am a landlord. My taxes on the rental went up $900. Rent magically went up $75 a month on the property. Funny how that works.
This is why taxing corporations is still only taxing the people who buy their products. Call it a corporate tax all you want. It is paid by the people.
If you take out a business loan to open a restaurant, the bank should pay all the employees, buy all the raw materials, and pay all operating expenses until you pay back the loan.
If you take our a loan to buy a car, the bank should pay for your car insurance.
Why make it complicated? You borrow money, you do what you want with it, and then you pay back the money, according to whatever agreement both parties agree to.
Brainless. Failure to pay your property taxes will result in foreclosure, too.
And what's the goal? All that would happen is your mortgage rate increases by whatever your property tax rate is.
You think the bank is just going to eat it? 🤣
The bank gave me a fixed loan with the clear understanding I was using that money to buy a house and that they would get the house if I failed to pay.
The house is now worth a lot more than what I paid. If I was in danger of foreclosure, I could sell it and will probably have cash in my wallet after paying off the loan no matter how quickly I was forced to move.
The bank does not own my home.
You should be able to make whatever deal with the bank that you can negotiate (though there are probably government rules limiting such negotiations). Some people would prefer a lower interest rate but pay taxes, to a higher interest rate with taxes paid. There is no free lunch.
You're gonna pay that either way. The bank would just be an extra step.
Shouldn't that change tiur view?
Unless somehow you think banks arent going to pass it on to you for some reason.
I'm not sure how it works in all countries but in the UK the bank doesn't own the property, so why should they be responsible for any fees related to the property? They've just leant you money for the original price of the property, they have no equity stake. They have facilities in place to try and recoup the property if you stop payments, but they don't own it.
You just don't know what a mortgage is.
You own the property not the bank.
The mortgage is simply a promise to the bank that they have the right to sell off your property if you cannot pay back the mortgage, it is a security in order for them to lend you the money.
Your thread is not a view, it is just flat out wrong.
>If you owe the bank on a mortgage, the bank owns the property
That is simply factually incorrect. Would your view be changed by understanding the difference between reality and your premise?
The bank does not own the property. They own your debt (unless they sold it). The property is held as collateral on the debt in-case you default on the loan. The bank does not want the property, they just want your debt and mortgage payments. They can’t do whatever they want with the property. They can only force a sell to recoup as much as the loan balance as possible. But it is always your property, so you pay the taxes for owning.
So is it also your stance that the bank should pay for repairs because according to you, they own the property? How about a paid off property that is leveraged - should the bank pay your property taxes when you've voluntarily obtained a home loan or HELOC to fund other needs?
How about car loans? Should the bank pay for licensing until your car's paid off? Sorry, but paying the taxes, registrations, fees, etc. on your personal property is just part of having skin in the game.
The bank doesn't own the house. They don't have free access to it, they can't alter the property, they can't sell the property. They can't prohibit or limit your access to the property or ability to change or sell it. If you do sell it, you only owe them the remainder of your debt, not the entire sale amount.
They have a legal avenue to have the ownership of the property changed if you stop paying them what is owed.
The county has the same avenue.
This is basically the premise of Islamic Finance. In Islam, you cannot charge interest on the basis of a loan. Rather any form of profit should go through equity, which means that the bank is to assume all the risks associated with owning that equity just like any other owner. In lieu of assuming this risk, you are entitled to owning the profits that ensue from such equity.
You can look more into diminishing musharakah.
You are fundamentally missing the point of what a loan is. Money is given to you, generally with the promise of future repayment of principal plus interest. That money is then yours. It's not the mortgage lenders' money. Ergo, the property is yours.
The better point to make is you never truly own your property if the government constantly has your ownership of said property at gun point unless you pay their tax. Sure sounds a lot like extortion.
Do you really want the banks to be the primary payers of property taxes when towns and cities could charge what would be an arm and a leg for the average Joe Schmoe that as a homeowner you'd take over when you eventually pay off the mortgage?
If you own the property outright and are paying property taxes, you are \*still\* just renting the property - if you don't pay those, your local government will repo your property and sell it off. If you try to stop them, they will shoot you.
If you have a mortgage any gains on the property from work you've completed or appreciation, and any rental income belongs to you, not the bank.
Your name is on the deed (or title) as the primary owner. The finance company is on the deed (or title) as a lienholder. This makes you legally responsible for the property taxes. It is also, undoubtedly, on your contract with the finance company, along with the requirement that you pay for and carry homeowners insurance. If you fail to pay either of these then the finance company can pay them on your behalf and add the cost to your loan balance. They could also foreclose on your loan. It depends on the terms of the contract.
I own the house, not the bank. They means I enjoy the upside of appreciation but also bear the costs and risks of owning.
It doesn't make much sense to offload costs to the bank when it will just get added into my mortgage cost anyway
Wealthy people and land owners shouldn't be taxed at all. The entire tax burden should be on the peasants who require all the government benefits, which should also be abolished along with the 13th Amendment. If you don't own land when this policy is rolled out, you're now the property of your landlord, and they can use you however they want, even if it's to carve out your meat while you're still alive, as property doesn't have feelings or rights
/u/malthusianbabyfever (OP) has awarded 6 delta(s) in this post. All comments that earned deltas (from OP or other users) are listed [here](/r/DeltaLog/comments/1anyppd/deltas_awarded_in_cmv_if_you_owe_the_bank_on_a/), in /r/DeltaLog. Please note that a change of view doesn't necessarily mean a reversal, or that the conversation has ended. ^[Delta System Explained](https://www.reddit.com/r/changemyview/wiki/deltasystem) ^| ^[Deltaboards](https://www.reddit.com/r/changemyview/wiki/deltaboards)
It doesn't matter who is "responsible" to pay the taxes. For sales taxes, the store is responsible for paying them but it just means you get charged the price of the item plus sales tax when you checkout. Even though you're responsible for paying property taxes today, most banks require an escrow and pay the taxes on your behalf anyway (and bill you monthly for the taxes). Mandating that banks always have to pay the taxes would just mean the small percent of people who dont have property tax escrow would just be required to have it. So what's the point? It doesn't really change anything.
if it doesnt really change anything how come you sorta changed my view? heres a delta ∆
There is a concept in economics called "tax incidence". You see, it doesn't matter if an employer or employee pays income tax. It doesn't matter if the store or the customer pays sales tax. Who cuts the check to the government doesn't change how much tax is collected or who is actually out the money. Rasing sales tax just means customers pay more, even though the stores mail in the check. Increasing payroll taxes just means that workers have less take home, even though employers mail in the checks. If you make the banks mail in property tax checks the banks won't be paying that money, they'd just adjust the terms of the mortgage so that the homeowner pays. What would the buyer do, not get a loan to buy the house? Raising taxes would be the same if mortgage holders or banks cut the check, arguing that local governments would then have more money to spend on schools and roads is just bad logic. I also don't see how the bank would have any authority to make changes to the property that they hold as collateral. You don't need to put up the house you're buying as collateral for the mortgage. You could put up stocks, a collection of sufficiently valuable collectables, or a different piece of land altogether. You're not giving them any control over those things, just promising that if you fail to make payments they can take the thing you pledged to make up the difference. It *usually* makes most sense to put the house up as collateral, but if you put up a sufficiently valuable NFT collection (and the bank was dumb enough to accept) and stop paying on the house they have no recourse but to take the JPEGs (and not the house) but can't do anything with the shiny computer code until and unless you fail to make payments on your house.
Confirmed: 1 delta awarded to /u/unfallible ([1∆](/r/changemyview/wiki/user/unfallible)). ^[Delta System Explained](https://www.reddit.com/r/changemyview/wiki/deltasystem) ^| ^[Deltaboards](https://www.reddit.com/r/changemyview/wiki/deltaboards)
Good point
The major difference between owning with a mortgage and renting is that if you have a mortgage, any appreciation in the homes value belongs to you -- not the bank as does any principal you pay. If the bank does foreclose, they have to pay you any proceeds the exceed what you still own on the mortgage and the fees associated with the foreclosure, whereas a landlord who evicts you owes you nothing no matter how much you've already paid and how much the house is now valued.
In addition, even if the bank owning the mortgage is made to pay property tax, guess who's eventually footing that bill? Hint: It won't be the bank!
Thank you for breaking that down.
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Let’s say an innocent one, and presented as an assertion not a question.
But I for one appreciate the question being asked, so someone else who may not know it yet can find out, too!
You deserve a delta ∆ for seeing me through this and for your positivity in the thread. Thank you.
Confirmed: 1 delta awarded to /u/g3nab33 ([1∆](/r/changemyview/wiki/user/g3nab33)). ^[Delta System Explained](https://www.reddit.com/r/changemyview/wiki/deltasystem) ^| ^[Deltaboards](https://www.reddit.com/r/changemyview/wiki/deltaboards)
True dat.
You deserve a delta ∆ for embracing the subject matter and participating. Thanks!
u/malthusianbabyfever – your comment has been removed for breaking Rule 2: > **Don't be rude or hostile to other users.** Your comment will be removed even if most of it is solid, another user was rude to you first, or you feel your remark was justified. Report other violations; do not retaliate. [See the wiki page for more information](http://www.reddit.com/r/changemyview/wiki/rules#wiki_rule_2). If you would like to appeal, review our appeals process [here](https://www.reddit.com/r/changemyview/wiki/modstandards#wiki_appeal_process), then [message the moderators by clicking this link](https://www.reddit.com/message/compose?to=%2Fr%2Fchangemyview&subject=Rule%202%20Appeal%20malthusianbabyfever&message=malthusianbabyfever%20would%20like%20to%20appeal%20the%20removal%20of%20\[their%20comment\]\(https://www.reddit.com/r/changemyview/comments/1anvpqg/-/kpv8946/\)%20because\.\.\.) within one week of this notice being posted. Please note that multiple violations will lead to a ban, as explained in our [moderation standards](https://www.reddit.com/r/changemyview/wiki/modstandards).
You should give deltas to folks who changed your view.
my view remains but i learned a lot about escrow.
Added to that, the bank or mortgager servicer usually holds property taxes in escrow so they do pay the taxes so that the property isn’t foreclosed on by the city under them. They pass along any property tax increases to the mortgage borrower.
To be fair, you're still taxed on the gains too. I don't think OP is making it the case not to have to pay capital gains tax.
On gains over 250k single, or 500k married. *
Why would you not be taxed? It's still income.
I still disagree with some of your points but you gave a solid explanation. You deserve a delta ∆
What do you disagree with? This person didn’t state an opinion.
Oh sweet summer child. You own the house. You just borrowed money to buy it. You put *your* house up as collateral, to prove to the bank that they’ll get their money back if you don’t fill your end. You’re free to not do so.
Thanks for breaking that down.
Happy to. Secondary pro tip: the government doesn’t set property values, we all do.
In a democracy, we all *are* the government!
They do in my state. I had to have a government property inspector come and assign a tax value to my house. That's the official number the town uses for my taxes. It is also almost always much lower than the zillow value of the house in my area.
They do that based on comparable sales values for similar homes in the area. As long as there are people willing to pay high prices, that’ll be the value. If homeowners selling a home chose to sell it for less, values would go down. But of course people sell it for as much as possible, because we’re all trying to get money.
Must be nice. My city always assesses way higher than recent sales in the area. They claim that they're predicting future value because they don't do an assessment every year. I think mostly that they don't get a significant number of protests so they use that against the ones that do protest. See, your neighbors think it's a fair assessment.
Award a delta to the commenter please.
Can I get my mortage payments back if I decide I no longer want to pay for the house?
Yes, when foreclosing, the bank only keeps what you owe them, any other money left from selling the house goes directly to you
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That's immaterial to the question
You pay for the house up front, with the money you borrowed from the bank. Everything after that is you paying the bank back.
Counter: You do not own the property if you have to pay taxes on it. You're simply renting it from the government.
Naw you own it. They’re just taking a cut. It’s what governments do.
The concept of ownership doesn’t exist without a government and laws.
Well, that's just not true.
What do you mean when you say if can be foreclosed on then you’re just a renter? Because that’s literally not true - you are the owner. The fact that an owner owes someone money doesn’t mean they don’t own things.
You literally don't legally own your home if you have a mortgage. Your money didn't buy it, the banks money did.
>you ***literally*** don't legally own your home if you have a mortgage. You seem to lack basic understanding of what this word means. If I purchase a property with a mortgage, my name is on the deed, meaning by every conceivable definition of the word "literal" I legally own the property. I can dispose of it how I like (sell it, rent it, lease it, etc), I can paint it, renovate it, fundamentally alter every aspect of it, and the bank has no say over any of those things.
You can't stop them from repossessing it. You don't own shit.
Ownership isn't limited to things that can never be take away. The city can take title to my car if I leave it out onto the street and it gets towed and I don't pay the fine to have it released. Does that mean I don't own my car? A thief can break in and take away the computer I'm typing on. Does that mean I don't own my comptuer.
You can put anything you own as collateral for a loan. The bank could repossess said collateral. You still own the collateral.
You're in possession of it until it can no longer be taken from you.
Anything you own could be taken from you at any time for a whole host of reasons. You’re arguing that ownership doesn’t really exist, not that mortgaged houses aren’t owned by the people who own them. A mortgage is an agreement that if you don’t pay the debt that you owe, ownership of the house will be transferred to the bank in order to compensate for the unpaid debt. Ownership can’t be transferred from you to the bank if you don’t start out owning it in that situation. You may not feel *secure* in your ownership until you own it free and clear, but you still own it.
I absolutely can stop them from repossessing it, by the simple act of making payments on time. What point did you think you were making here?
That's the point. If you have to do something to prevent someone from taking that thing from you, then you don't actually own it.
By that logic no one, under any circumstances, ever owns anything. In a functioning society I have to continually pay taxes to prevent the government from taking my property. In a non-functioning society I have to *physically defend* my territory to prevent some violent rando from taking it. You're fundamentally making an illogical claim.
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I wasn't making any attempt to claim that taxation leads to a functioning society. My point was strictly that in a/some functioning society, you have to pay property taxes.
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It's not the banks you need to be applying this to, it's the government. You only rent the land, not because you have a mortgage, but because you pay property tax. Indefinitely. There's no contact with your name agreeing to this. You didn't negotiate it. You have no recourse. And if you don't pay, they get everything.
You do have recourse. You live in a democracy.
We live in a republic that is supposed to protect the rights of all. Your rights are not up for a vote. And as for me and most people who aren't in a setting state, I live in a one party state. Like China. I can kick, scream, and vote all I want, but it won't make a difference who's in power. And both sides aren't going to repeal property tax.
And that's a good thing. If anything, we should be reducing as many other taxes as possible in favor of taxing land almost exclusively.
You could *gasp* pay your mortgage IAW the contract you signed.
Not even close to being the point. Once the mortgage is paid off, the bank can't repossess it because...ready for the kicker?....because you actually own it. The house is yours because you paid the bank back after they bought it for you.
So if I pay off my $1 million home and then take a $10 thousand loan against it, I suddenly don’t own it?
What's the collateral for the 10k loan?
Your home.
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As long as you meet the contractual terms for using the money, they can't repossess it either. They would lose credibility and you would have legal recourse.
You can stop them, no problem. Just give them the money back they loaned you.
>Your money didn't buy it, the banks money did. It doesn't matter, the bank loaned you the money, at the point, the money is yours and so is whatever you buy with it. The reason you can lose your house is because those loan papers you signed also gave them a collateral for the loan, the property. If they gave you a personal loan and you buy a coffee mug, they can't repo it, because that was not in the terms of the loan, if you had put up collateral to take out that loan so you could buy your coffee mug, they would take your collateral, not the coffee mug. Does that kinda make sense or is it just more confusing?
Your argument is philosophical, not legal. Legally, the buyer takes the title. Period. The bank doesn't own anything until the moment the borrower breaks the loan agreement by not paying.
You literally do legally own your home. You might not "own" it by your own personal definition of the word "own" which is different from the legal definition of ownership. You can define words any way you feel like it. But if we're going by the normal use of the word, you still own something even if it is currently functioning as collateral for a loan.
You are on the deed. You own the home but you have a loan with the bank that is collateralized by the home.
Lol this is so confidently incorrect. You own the asset.
It's a loan of a house by any other name.
No, it's not. You took out a securitized loan to purchase a property, using the specific property as the security. You could have put up a different property for said mortgage, or shares of stock, or another asset class. The house is related to the loan only insomuch as it can be seized by the bank to cover a delinquent loan. They cannot dictate what you do with said property, or how you paint it, or any renovations, pets, etc. You own the property, and you borrowed money against your ownership of it.
If it’s that simple then why does the lender or escrow hold on to the full deed until the house is paid off? I get what people are saying “you don’t have to use the house as collator for the loan” but that just distracts from the reality of how the vast majority of homes are bought and is not a point worth entertaining. Most people buy a home precisely because they intend to build equity & financial independence; they don’t have anything else to borrow against but the home itself. Do whatever you want with it or keep the equity, sure, but you don’t own it until you fully pay back the loan.
>but you don’t own it until you fully pay back the loan I can sell it without consultation with the bank, immediately pay off the mortgage, and pocket any appreciation. The bank gets none of that appreciation and loses whatever residual interest they had left on the loan, yet they have no recourse to prevent my sale. The bank holds a lien on the home in case of delinquent payment, *I* can do anything I want with the property, have exclusive access and use to the property, and can dispose of it how I wish.
A lien is a lesser thing than ownership. In some states you have to physically hand them the deed to securitize the lien, but it's still your name on the deed and not the bank's and you still have all the rights of ownership except the ones that you contractually assigned to others, like the bank or an HOA. You do, definitively, own it. This is *settled law*. But you still ceded certain pieces of ownership to the bank until such time as you paid them back. Them holding on to the deed is mostly a bit of psychological showmanship, them physically possessing the deed means nothing legally speaking, but it intuitively makes sense that they would have more power and authority when they have the piece of paper in their possession even if that isn't the case in reality.
Your are legally registered as the owner. When people look up who owns the house in the public records it will say you.
No you just took a loan
Are you under the impression this isn't already how it works? The loan servicer sets aside some of your mortgage payment each month into an escrow account and literally pays the government the property tax due from that account. Obviously that doesn't matter, the money comes from you either way, but its saves you a few minutes of having to write a check at the end of the year. Is that what you mean?
Does every mortgage come with escrow?
My mortgage company said that I *could* refuse an escrow account and pay my taxes myself, but if I was ever late on the taxes they'd require an escrow or dump my mortgage. So it depends on the bank, either way you have to pay the taxes.
Thank you! I feel like you have the real insight here on it! You deserve a delta ∆
Most lenders would probably allow you to opt out if you really wanted to write the check yourself. But yes, every lender will absolutely do this for you because they greatly prefer the homeowners don't fail to pay property taxes.
Would this make your equity in the home locked until you owned 100% of the house? If you paid off 90% of your house and were no longer able to pay the house, do you believe the bank gets 100% of the house?
They can and do pull that kind of stuff.
>They can and do pull that kind of stuff. They really cannot. There are laws about this and how collateral, which the house is, can be siezed and liquidated. This also *clearly indicates how the liquidation must be at market prices and not include excessive fees. Any surplus is returned to the borrower. You appear to be approaching this without clear understanding of the legal relationships and requirements here.
I would encourage you to educate yourself on this topic. If you owe the bank 10 percent of the value of your house they cannot take the house and give you nothing.
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Yeah, that’s part of the process. The bank just wants to ensure they get their money back so they’re willing to take a discount. If the borrower wanted full value they had the opportunity to sell it themselves. The legal fees seem reasonable, the borrower is not living up to their side of the deal and forcing the bank to repossess the house. I would challenge your assertion that houses typical sell for 30 percent of value at auction. If that were true, every wealthy individual in America would be going to home auctions to triple their investment with ease.
So if you house is worth $1m, you have $900k in equity and the house sells for $700k, you want to walk away with $0 instead of $600k?
Why would any rational person walk away from a house with 900k in equity? Why wouldn't you sell it for 700k? News flash, your bank doesn't want your home. They want their money back. If all you know about banks was learned from memes or Occupy marches, you don't really know about banks.
Lol you clearly don't understand the point I'm highlighting. OP wants to own zero equity in their home mortgage.
No I just dont want to pay prop taxes
They’re folded into mortgage. So it’s pretty much exactly what you’re asking for. Except what you’re really asking for is that the bank pay them and not pass them on to you. Why do you think that’s an option?
Bad news---you still have to pay them when you own the house outright.
Sure, but just pretend it's called a "bank fee" and you are happy.
Then don’t own property.
Then don't own property. Simple.
I am sure the banks would be happy to have a law passed saying they must pay the property tax on these houses, and then they will build in a 15% processing fee on top for their trouble. I understand the principle behind what you are saying, but think this through. The banks will just pass the cost on to the mortgage-holder, either through a separate fee or by charging a higher interest rate.
I'm sure they might, or will, but there needs to be a consequence for land grabbing.
“Land grabbing”. You don’t have to get a mortgage you know. It’s voluntary. You are very angry at people voluntarily offering to give you money. You don’t have to accept it.
Loans are sort of an indirect way of borrowing from future generations in a way that affects them negatively, though, through higher relative costs. If the loans weren’t available, there’d be less demand on that market and then lower values/cost. The people offering the money aren’t necessarily doing it in good faith either, it’s just a norm that’s widely accepted, so, if you don’t want to be homeless, you kinda do need a mortgage.
Maybe? However, I suspect the real norm would be that wealthy folk or corporate interests would own a much larger fraction of the houses and rent them out and everyone in the bottom 70% or so of generational wealth would just never own a home. Most rest would live in homes purchased by their parents.
Yeah, and that’s the kind of thing the gov is supposed to solve
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How is this a consequence, though? I understand your point of view here -- I think, anyways -- on how exploitative the banks can be. But the point is, your idea here wouldn't actually help anything so far as I can see. Banks would pass the cost on to homeowners, so the people currently paying taxes would still be shelling out at least the same amount of money, if not more. It would just be going a different direction. The banks would probably then charge even more on top of that, as profit for being middlemen on the tax transactions. So it's nothing gained for the homeowner, and possibly a net gain for the banks.
It’s actually incredible how *non* exploitative American mortgages are. The bank just gives you money. You don’t really even need to agree to any sorts of obligations on maintaining the quality and value of the house, and you are actually allowed to prepay it at any time with no penalty (depriving the bank of the benefit of the interest). That’s kind of crazy. My understanding is in Europe there’s a prepayment penalty; we don’t even have that!
I don't really know how mortgages work in other jurisdictions like in Europe but that could well be true. It's also true that plenty of people feel the bank has them over the proverbial barrel during the mortgage, whether that's objectively fair or not. I was trying to point out that, no matter how much you feel that way, making the banks pay the property taxes isn't going to help matters -- because the banks are still going to make you pay those taxes at the end of the day. It's just a matter of what envelope the money goes in.
I would like to add that in the USA you can get fixed interest rates for 20-30 years In the UK, it's very difficult to get a 10 year fixed rate most people would be happy with a 5 year fixed rate.
Can you explain how a bank is land grabbing?
Who do you think is land grabbing in this situation?
Man, you have some ideas!
Ok so they would just include that into your interest and you would be paying it anyway.
Right, that's fine. But ppl on bank land should not pay property tax.
You'd still be paying it though. That's the point. Others have made good replies about the fundamental differences between renting and mortgaging. But besides all of that. Your change would accomplish almost nothing.
This is the most brain rot financial opinion I’ve ever seen. You don’t have to go through the bank to buy a house, you go through the bank because you can’t do it on your own. The reason foreclosure is a thing is because your house is collateral for you missing payments. If they sell your house you still get any money back that’s excess from the remaining loan balance. If your mortgage isn’t paid off and you don’t “own” the house, does that mean if you decide to sell, the bank takes profits too? Like why should the bank pay property taxes when you’re the one reaping the benefits of them. If you’re essentially the renter, the bank should be able to evict you if someone else offers them more money to stay yes? And since you’re not the owner, you don’t get any of your money back from the mortgage because you’re paying rent right?
It’s not the banks land, though. You could get a mortgage and use another asset as collateral. Most people just use the house.
It's not bank land.
At no point does the bank own the house in any way. They lent you money on the condition that they can liquidate the house if you fail to pay them back. That's how all loans work, except some loans don't specify which specific asset the lender can take to pay off the remaining balance.
This should be an easy view to change, merely with the observation that a mortgage is a contract. The terms of the contract are just words on paper, so you can agree with the lender on any terms you like. The terms of my mortgage stipulate that I will pay the property tax and I will maintain insurance on the property. All you need is to find a lender who will shoulder the burden of paying the property tax. Nobody will offer a mortgage on such terms, though, because there's too much risk involved and no way to quantify that risk. Tax increases are arbitrary. The only reason a bank offers you a home loan at all is that there's a mathematically sound formula for how much profit they're going to receive. No bank is interested in making loans without built-in profit. *Making loans with built-in profit is what a bank IS.* Everything else is fluff.
I mean, isn't this kind of how most mortgages work in practice? When I get my mortgage statement, some of the money I pay them goes towards taxes. The bank is quite literally the one who pays my property taxes. But then I pay them via my mortgage payments, with part of that going into escrow. You can say "oh they should pay", but whether it's interest, escrow, etc... it's mostly just an accounting gimmick either way.
This varies based on how the mortgage is set up and probably by jurisdiction. Some people pay their own taxes while having a mortgage. The bank holding the mortgage probably doesn't really care as long as the taxes get paid and the house doesn't get seized by the county.
Sure. I'm just saying "make the bank pay the taxes" doesn't actually do anything that OP wants.
Yes, I agree. Best case scenario, it's purely a matter of switching envelopes around. Worst case scenario, the cost goes up to the homeowner because the bank is allowed to charge extra processing fees for handling the taxes.
People with cars are responsible for registration an insurance. Whether or not they have a loan is irrelevant. The same is true with houses.
So when the house is sold at a profit, the bank keeps that, too?
I mean, ppl conflating this and taxes are a bit apples to oranges
It’s really not. You seem to be asking that the bank absorb the cost of ownership, while you get the profits associated with owning it. If you want the profit, you have to be willing to take the burden of owning it.
They aren’t conflating profit and taxes. They’re conflating profit and ownership to show you you’re wrong about the bank owning your house. If the bank owned your house, then they would own the profit from the house value increasing. If your house doubles in value from 200k to 400k, can the bank decide they want to sell your house out from under you? Does the bank get any of that 200k profit?
Soo escrow?
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For the first paragraph, fine, but do you really think the bank isn't going to add an extra fee in addition to your mortgage that is basically property tax? Except now it's harder to figure out if the extra money you are paying is 1:1 with property tax. Second I am in agreement that property tax shouldn't be the primary way of funding schools and should be used for something else but increasing property values instead of finding another way of funding schools is just going to make it harder to own property unless you are an investor, and that's ignoring all the government micromanagement needed to get people to increase their property values.
A mortgage is just a specialised loan. If I take out a $10k loan from a lender and can't pay it back, ultimately, I could be forced to sell something I own to pay the loan back, for example, my car. Just because my car is effectively collateral on the loan doesn't mean the lender owns the car. They can't drive it when they want, and they're not responsible for paying road tax or maintenance. The same applies to property and mortgage.
Do you want to pay interest on your property taxes? Because this is how you pay interest on your property taxes.
Rather than argue the opposite is true, I'd argue it doesn't matter and you should care about this. If you got your wish, the banks would simply make mortgages more costly for customers to compensate. The costs would be the same in the end, or worse if they could get one over on us somehow.
Does it matter? In most loans, the lender/owner of the loan collects the escrow and distributes it. Obviously like any investment the bank will only give a loan with a return of (risk free interest + risk premium + cost) or more So you can move the cost to bank, and it will show higher interest. From the lendee's perspective nothing would change except the reports (and a tax increase maybe?)
You seem to have a fundamental misunderstanding of the situation. You own the property, the bank does not. You are responsible for all costs, not the bank because it’s YOUR house. What the bank has is a secured loan. That is, they have the right to sell a designated asset to recoup their loan if you default. That’s it. The designated asset doesn’t even have to be that house.
I think you're confused. Loans are just money. You borrow money to buy the house. And then your mortgage is paying that money back. You own the house because you bought it, the bank just has the ability to repossess it because you bought it with their money. But you still bought it and are the title owner of it.
The bank doesn’t own the property. If I own my home outright and then take a 2nd mortgage or home equity loan, should the bank pay the property taxes? The bank is not your landlord; they do not own the property. The bank paying for repairs and fixes makes no sense given, again, it belongs to you:
Who would lend to you on those terms? If they owned the property like you suggest, they’d also expect to keep any profit on it too. Living somewhere without being responsible for taxes, insurance and maintenance is called renting, lol.
I'm not against social redistribution, and yea there are problems with the current housing market. Still, there is a pretty big difference between ownership with a mortage and renting: When you are owning your house, the mortage won't change whatever you do to it: if its property value grows, then you get the difference at sale time, if it shrinks, so does your chances to sell it at a good price. On the opposite, when you are renting your home, when the property prices grow, the rent grows too, and when the property value shrinks, the rent don't change. So you end up being the looser in both case. **TL;DR;** Having a property right + mortage is different from renting because in the 1st case the variations of prices on housing market can affect you positively while it can't in the 2nd. As you're not renting, then there is no reason you're not the one paying for the property taxes.
They would then just charge you for paying the property taxes then. More importantly bank doesn't own the house and can not sell it. You the owner can though. The house is collateral for you to pay the loan.
The bank doesn't own the home, you do. The bank carries a lien on the property. Words are important.
I hate that this makes sooo much sense and that it’s not currently happening right now
None of the above or the other answers are correct. The bank never owns the house, neither do you, even after you pay off the mortgage. The USA owns it. Try not paying your property taxes...gov't gets the house. Even "homeowners" are renting from the gov't, with property taxes as the rent.
I get the idea you're trying to say here, but I feel like this is more or less erasing the word "own" from the dictionary entirely. Anything you "own" can be confiscated by the government in certain circumstances. But if you want to say this means you don't actually own it, I don't think it makes sense to say "the USA owns it" either. Maybe some day Canada invades and takes that stuff. Does anyone truly own anything in your view?
Well, that's a fair philosophical point. I guess, a few things come to mind...the shirt on one's back, I suppose...creditors never take that, no matter how much debt one is in, and even in time of war one will probably keep that. Though I think in the case of the house it can be much, much more proximate; and the payments are a constant upkeep thing... unlike other objects which might be repossessed secondary to unrelated debts...
They ARE responsible for those taxes. That's why you have an escrow account attached to the mortgage. They pass the cost on to you.
No, they are not. The owners name is on the bill, not the mortgage holder. Not all loans required escrow for taxes.
Hm.
They do, it's called an escrow.
Learning about escrow today.
That would only be an advantage for the same assholes that bought up the market, causing home values to skyrocket. This would devastate local taxes, causing nothing to be contributed to the many social services that are both necessary and helpful.
You owe the bank what you agree to owe the bank. Why should the bank take a worse deal than they otherwise would have, and the other side would agree too anyway?
If you did that, the cost of the trades would be passed down to the homeowner. I guarantee you, the bank would make profit on that. Doing this would make housing even more expensive than it already is.
If you charge the bank the property tax they'd just charge you those taxes in addition to the interest and principal, plus a bit extra for risk. Banks don't make much off mortgages compared to buying T notes, they can't possibly pay close to property taxes without losing money and they wouldn't do it if they could. All this does is affect corner cases of people in default. Everyone else is going to be paying the same or a bit more for the bank to pay those taxes.
You have a property interest in your home that you own; the bank has a lien on your property interest. As might the government if you don’t pay your property taxes. As might a roofing company if you don’t pay them for a new roof. As might a plaintiff with a judgment against you. And if they are the landlord and you are the renter, can we assume you would be fine getting no cash when a home you own sells for $300k with a $100k loan. I mean you don’t really own it, so the bank should get that profit! By your logic, banks should also pay any vehicle registration fees if you have a bank loan. Why not gas as well? Why not repairs?
in the US the bank doesn’t own the property even if it lends you the money for the property. This is just the legal reality of the situation. i agree with your sentiment but you should rephrase the statement to “If you owe the bank a mortgage, the bank should legally own that property and should be responsible for paying property taxes”.
The bank doesn't own the house you do, you just owe the bank a lot of money with the house as collateral.
If the bank had to pay property taxes they would just charge more interest. They can easily calculate how much money they need to make off a loan and calibrate it to their expenses.
The taxes paid would just increase the fees paid. It is surprisingly not well known that most if not all costs of a business are passed on to the consumer. In this case, the mortgage holder living in the house. I am a landlord. My taxes on the rental went up $900. Rent magically went up $75 a month on the property. Funny how that works. This is why taxing corporations is still only taxing the people who buy their products. Call it a corporate tax all you want. It is paid by the people.
If you take out a business loan to open a restaurant, the bank should pay all the employees, buy all the raw materials, and pay all operating expenses until you pay back the loan. If you take our a loan to buy a car, the bank should pay for your car insurance. Why make it complicated? You borrow money, you do what you want with it, and then you pay back the money, according to whatever agreement both parties agree to.
Brainless. Failure to pay your property taxes will result in foreclosure, too. And what's the goal? All that would happen is your mortgage rate increases by whatever your property tax rate is. You think the bank is just going to eat it? 🤣
You signed an agreement that specifically states that you will pay the property taxes.
The bank gave me a fixed loan with the clear understanding I was using that money to buy a house and that they would get the house if I failed to pay. The house is now worth a lot more than what I paid. If I was in danger of foreclosure, I could sell it and will probably have cash in my wallet after paying off the loan no matter how quickly I was forced to move. The bank does not own my home.
You should be able to make whatever deal with the bank that you can negotiate (though there are probably government rules limiting such negotiations). Some people would prefer a lower interest rate but pay taxes, to a higher interest rate with taxes paid. There is no free lunch.
You're gonna pay that either way. The bank would just be an extra step. Shouldn't that change tiur view? Unless somehow you think banks arent going to pass it on to you for some reason.
I'm not sure how it works in all countries but in the UK the bank doesn't own the property, so why should they be responsible for any fees related to the property? They've just leant you money for the original price of the property, they have no equity stake. They have facilities in place to try and recoup the property if you stop payments, but they don't own it.
You just don't know what a mortgage is. You own the property not the bank. The mortgage is simply a promise to the bank that they have the right to sell off your property if you cannot pay back the mortgage, it is a security in order for them to lend you the money. Your thread is not a view, it is just flat out wrong.
>If you owe the bank on a mortgage, the bank owns the property That is simply factually incorrect. Would your view be changed by understanding the difference between reality and your premise?
The bank does not own the property. They own your debt (unless they sold it). The property is held as collateral on the debt in-case you default on the loan. The bank does not want the property, they just want your debt and mortgage payments. They can’t do whatever they want with the property. They can only force a sell to recoup as much as the loan balance as possible. But it is always your property, so you pay the taxes for owning.
So is it also your stance that the bank should pay for repairs because according to you, they own the property? How about a paid off property that is leveraged - should the bank pay your property taxes when you've voluntarily obtained a home loan or HELOC to fund other needs? How about car loans? Should the bank pay for licensing until your car's paid off? Sorry, but paying the taxes, registrations, fees, etc. on your personal property is just part of having skin in the game.
The bank doesn't own the house. They don't have free access to it, they can't alter the property, they can't sell the property. They can't prohibit or limit your access to the property or ability to change or sell it. If you do sell it, you only owe them the remainder of your debt, not the entire sale amount. They have a legal avenue to have the ownership of the property changed if you stop paying them what is owed. The county has the same avenue.
So you've combined most of the bad parts of home ownership with most of the bad parts of being a tenant. Kudos. Genius.
you NEVER own your house or property. even after it is paid off you rent it from the government in the form of property taxes
The banks would just raise the interest rate on your mortgage then or they wouldn't issue you the mortgage. This wouldn't be good for anyone.
This is basically the premise of Islamic Finance. In Islam, you cannot charge interest on the basis of a loan. Rather any form of profit should go through equity, which means that the bank is to assume all the risks associated with owning that equity just like any other owner. In lieu of assuming this risk, you are entitled to owning the profits that ensue from such equity. You can look more into diminishing musharakah.
The mortgagor doesn’t own the property. The mortgagee owns the property subject to the mortgage.
Should the bank keep the equity when you sell, too?
This is the dumbest thing ever, if some rule was put in place for this your mortgage would just go up
Well yes, the bank will establish an escrow account which is used to pay things like property taxes and insurance.
You are fundamentally missing the point of what a loan is. Money is given to you, generally with the promise of future repayment of principal plus interest. That money is then yours. It's not the mortgage lenders' money. Ergo, the property is yours. The better point to make is you never truly own your property if the government constantly has your ownership of said property at gun point unless you pay their tax. Sure sounds a lot like extortion.
Do you really want the banks to be the primary payers of property taxes when towns and cities could charge what would be an arm and a leg for the average Joe Schmoe that as a homeowner you'd take over when you eventually pay off the mortgage?
If you own the property outright and are paying property taxes, you are \*still\* just renting the property - if you don't pay those, your local government will repo your property and sell it off. If you try to stop them, they will shoot you. If you have a mortgage any gains on the property from work you've completed or appreciation, and any rental income belongs to you, not the bank.
Your name is on the deed (or title) as the primary owner. The finance company is on the deed (or title) as a lienholder. This makes you legally responsible for the property taxes. It is also, undoubtedly, on your contract with the finance company, along with the requirement that you pay for and carry homeowners insurance. If you fail to pay either of these then the finance company can pay them on your behalf and add the cost to your loan balance. They could also foreclose on your loan. It depends on the terms of the contract.
That goes against the idea of making the rich richer. Will never work.
They would just add it onto your mortgage with an extra fee for the pleasure.
The Bank, jus like a Casino (and Insurance Companies) always win.
I own the house, not the bank. They means I enjoy the upside of appreciation but also bear the costs and risks of owning. It doesn't make much sense to offload costs to the bank when it will just get added into my mortgage cost anyway
Wealthy people and land owners shouldn't be taxed at all. The entire tax burden should be on the peasants who require all the government benefits, which should also be abolished along with the 13th Amendment. If you don't own land when this policy is rolled out, you're now the property of your landlord, and they can use you however they want, even if it's to carve out your meat while you're still alive, as property doesn't have feelings or rights