Tuesday, December 6, 2011

Banksters' Ripoffs Now Extend To Homestead Exemption Fraud; Retain Tax Benefits On Foreclosed Homes Originally Claimed By Former Owners

In Providence, Rhode Island, GoLocalProv reports:

  • Banks and other lenders have saved hundreds of thousands of dollars on foreclosed homes in Providence, thanks to tax breaks that were intended to help homeowners, according to data obtained by GoLocalProv.

  • This year, 44 banks and other companies have foreclosed on just over 341 properties in Providence, as of September. But those banks retained owner-occupied homestead exemptions on about 200 of those properties.

  • In all, the exemptions—some as high as 50 percent—saved those banks about $422,615 on their 2011 tax bills, a GoLocalProv review of city data found.

  • To Brenda Clement, executive director of the Housing Action Coalition of Rhode Island, the exemptions were blatantly unfair: “You shouldn’t be getting an exemption if you’re not a homeowner,” she told GoLocalProv.

  • Six figure savings for big banks Those banks that racked up the most savings in exemptions are some of the biggest names in the mortgage industry. Topping the list were Fannie Mae and Freddie Mac, two mortgage giants that are government-sponsored companies.

  • Fannie Mae got a $121,722 in tax breaks on 61 properties it had foreclosed as of this month. Had it been billed at the full 2011 tax rate of $30.38 per $1,000 in value, the company would have owed an additional $121,000 in taxes.

  • Freddie Mac saw its total tax bill sawed nearly in half, owing $53,124, instead of the $101,582 it would have had to pay without the homestead exemption.

For more, see Banks Cash in on Foreclosures in Providence.

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