A recent study produced by LERETA, a national real estate tax services provider, showed that overall tax delinquency rates in California increased to 3.3% for 2015, a 24% increase from the previous year.
San Bernardino led all California counties with over a 9.1% delinquency rate, nearly three times the state average. The study noted that nine counties in the state had delinquency rates 300% higher than the other 37 counties. The list of counties and their delinquency rates can be found by downloading the free study.
Richard Yonis, SVP of LERETA pointed out that “LERETA’s objective is to provide the mortgage servicing industry with insight on where the greatest risks lie for their portfolio of loans.”
The landmark study, which looked at property tax bill activity in California for the last three years, concluded that the average bill increased 5.9% in 2015 to $3,865.
Yonis noted, “anytime we see overall tax delinquencies rise, there are increased risks for mortgage servicers, particularly in the area of non-escrow loans. Fees, penalties and even property losses are some of the issues we see mortgage servicers facing with these type of loans.”
Yonis also pointed out that there are a number of things servicers can be doing to mitigate these risks. “To start, all escrow loans should be audited and monitored to ensure the correct payments are being made to the right taxing authorities on time. In addition, servicers should be particularly sensitive to loans in these higher delinquent markets.”
When asked what motivated LERETA to develop this study, Yonis was steadfast. “Our objective is to give our clients as much insight as possible about market trends and what that means to their business. We started with California given the sheer size, but can help any servicer identify problem areas should they have a need.”
To download a free copy of the study, click here.