Mortgage lenders could be missing out on a way to re-engage with homeowners and guide them to potential thousands of dollars in savings.
Property tax payments are climbing
"They're largely in the dark," said Alison Tulio, president of Incenter Tax Solutions, about mortgage professionals. "And I think when they do hear about it, they think it's too good to be true. It's not."
The top five states have an average effective real-estate tax rate of 2.17%.
The Fort Washington, Pennsylvania company, which serves both commercial real estate and homeowners nationwide, saved customers on average $4,600 per property last year, Tulio said. The firm's tax specialists, with the aid of appraisers from sister company
Homeowners paid $173.6 billion in property taxes to local and state governments in the first quarter alone, according to the National Association of Home Builders. The growth rate jumped fourfold from the same time last year, coinciding with continued,
The National Taxpayers Union Federation estimates between 30% to 60% of taxable property in the country is overassessed, impacting middle-and lower-income taxpayers more often. Incenter said it's worked on more appeals in areas where
A successful appeal is far from a guarantee, attorneys who spoke to National Mortgage News said. However, there's also typically no limit to appeals, and Tulio said past clients have appealed three to four times in a row.
Despite the impact to homeowners, loan officers are largely unaware of the process and firms small and large don't advertise the issue. Originators who spoke with National Mortgage News often expressed surprise, and interest when asked about the process.
"That's fascinating," said Ray Grewe, a branch manager with Paramount Residential Mortgage in the Greater Baltimore area. "It would be interesting because we are definitely seeing a lot of counties around the U.S. now starting to reassess because values are going up."
Realtor Dave Mattes at RE/MAX helps homeowners appeal their property taxes in Berks County, Pennsylvania, also an hour northwest of Philadelphia. The industry veteran posts YouTube videos to explain topics including property tax appeals, which he described as "the least publicized thing around."
The county requires homeowners to meet a certain set of criteria to appeal, including having an appraisal current within the last six months. The county uses a unique formula to determine property taxes, and homeowners only need to spend $25 to submit an appeal during the application window between July 1 and Aug. 15.
"Sometimes it's an absolute grand slam home run and sometimes it's, you know, $400 a year," said Mattes.
Home values in the county average $270,000 as of June 30, according to Zillow. Mattes said he usually helps between 6 to 10 homeowners during each appeal period. He doesn't typically see mortgage professionals advertise the appeal opportunity to homeowners, but suggested it would be an easy win to re-engage customers.
Michael Campbell, an attorney at Maryland-based Miller, Miller & Canby, noted the success rate of appeals is low. The expert said he's seen challenges to property values in the Maryland, Virginia and Washington, D.C. area close to double in the past year.
"Trouble is when people call I'll also do some research and look at comparable sales and when the sales prices have increased like they did in the latter half of the pandemic, sometimes there's just no basis to appeal it," he said.
Tulio claims Incenter has a 98% success rate nationwide, citing an ultra-conservative approach to cases. Homeowners using the service only pay Incenter if an appeal is successful, and the company gets 50% of the homeowner's first-year tax savings. The process typically takes between 30 to 90 days depending on the county, Tulio said.
Mortgage activity is still 30% down from the same time last year amid lofty home prices and
Incenter monitors the portfolios of lenders and servicers annually. The firm is likely the only national player in the business, with competition in the form of a plethora of local law offices. Realtors also often post on social media like LinkedIn about their local county's assessment appeal window opening, while fewer lenders feature simple explanation blogs on their websites.
The process varies greatly across the country, and not all appeals are speedy. Tulio said she's waiting on hearings to be scheduled for appeals from last year in Philadelphia. Still, the attorney called the service a value-add for lenders.
"You're putting more money back into your borrower's pockets, so obviously that's going to drive referrals," she said. "It's going to keep those borrowers loyal to the lender."
Mattes suggested homeowners have the capability to tackle the process themselves, given the abundance of both public record and market information.
"My wife and I bought two properties last year, we appealed the results and I imagine between those two, we're going to save $2,000 a year," he said. "And we overpaid for the property. You feel like you overpay in this market. So that would help."
Maria Volkova contributed reporting to this article.
