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Homeowners get second chance at lower taxes
Submitted by Medill News Service on Fri, 03/07/2008 - 11:29am.
By Shawna Ohm
Medill Reports - Chicago
Mayor Daley and the Cook County Board of Review announced Wednesday a special property re-assessment period that could result in lower taxes for homeowners - good news for residents of Mount Greenwood, Beverly and Morgan Park whose assessments likely skyrocketed in the last year after the housing boom.
From March 17 to March 30, there will be a second window for property owners in Chicago and suburban Cook County to appeal their assessments. Daley recommended the re-assessment as a way to balance previously inflated assessments, the housing crisis and the slowing economy.
This is the first time the Board of Review has reopened the process for additional assessments.
"There's a crisis here and I think we can help," the mayor said at a press conference in Garfield Park. Typically less than 3% of property owners appeal their assessments. The Board of Review has pledged to help homeowners with the sometimes daunting process.
"We will do the research for them if they want us to," said Board Commissioner Joseph Berrios.
The Board of Review plans to evaluate economic conditions and the value of surrounding properties into its new assessments.
As foreclosures in neighborhoods increase, property values drop, something that the new assessments will factor in. The mayor has also released to the board a list of assessments that may have been unfairly inflated.
The mayor said he believed the foreclosure surge in Englewood just north of Beverly was partly caused by inflated property assessments. After predatory lenders gave homeowners loans for significantly more than a home was worth, the home was the reassessed as being worth more even than the inflated loan. This significantly raised property taxes for homeowners making them default on mortgages and other payments, the mayor said.
This attempt to lower assessed property values could negatively affect homeowners' equity (the value of the property that owners can borrow against). But the Board and the Mayor said that the resulting tax breaks are more substantial than the loss of equity.
According to Munai Newash, a national processor at Acorn Housing, a group that helps people in foreclosure, taxes make up 10%-20% of monthly payments for people in foreclosure.
"(The re-assessment) will definitely help but it has to be coupled with help from the lender as well," said Newash, who added that most of her clients need to have a $200-$300 reduction in their monthly payments, and a tax cut might not afford them that much.
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