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  • Feb 22, 2008 11:32 am US/Pacific
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FAQ: Economic Stimulus/Home Mortgage Crisis

Questions answered by CBS13 Financial Expert
David Schauer, CFA, MSFA, CFP®
Financial Planner
Hanson McClain

Click here to email David your questions.



QUESTION: If the housing values are going down, shouldn't property tax go down too?
ANSWER: Yes, you need to call your County Assessor's Office to ask that your home value and property taxes be reassessed.


QUESTION: Why are subprime borrowers panicing when California Section 580b Anti-Deficiency provides protection?
ANSWER: The problem is for those people who cannot refinance.  Those people who have a mortgage payment going up, and owe more than their home is worth are in a precarious situation.  Due to the "Purchase Money" rule lenders cannot come after the homeowner for the deficiency.  However, there is an emotional tone that walking away from one's home may take on a homeowner. Furthermore, for many people they feel a moral obligation to fulfill the contract that they entered into.  Additionally, many people have refinanced their home purchase of just a few years ago, and therefore the loan in question is a refinanced loan, and may not qualify as a money purchase loan.  Investment property is an additional issue that will need to be addressed by the lenders and the homeowners as well.

QUESTION: Just two weeks ago a 30-Year APR was 5.4%.  But now that they have lowered the Federal rates, it has gone up.  I can't understand this.
ANSWER:  Mortgages do not move in conjunction with the Federal Funds rate, which is what the Federal Reserve controls. The 30 year mortgage most closely follows the 10 year treasury bond.  Which has moved up from the January 23rd low.


QUESTION:  In regards to the Economic Stimulus Plan, do senior citizens who only receive Social Security need to file a tax return in order to receive the $300 rebate?  Even though they owe no tax & receive no tax refund?
ANSWER: The 2008 tax rebate is triggered from filing a 2007 tax return. However, some taxpayers do not have to file a tax return due to not meeting the income thresholds. If taxpayers follow the normal course of non-filing (as they are legally justified in doing), they will disqualify themselves from receiving the 2008 tax rebate (i.e. the stimulus package).
To alleviate this and to put taxpayers on notice, the IRS has put out press releases and has developed a special Form 1040A for those who do not need to file except for the ability to receive the tax rebate. It is important that the taxpayer write "Stimulus Payment" across the front of the return in order to notify the IRS of the filing of the return for tax rebate purposes.  Seniors with at least $3,000 in qualifying income (which includes not only wages, but Social Security benefits, certain veterans' benefit payments and railroad retirement benefits), should report these benefits on Line 20a for form 1040 or Line 14a of form 1040A.  For low income seniors that cannot afford to pay for tax preparation, a solution would be to contact the IRS's Volunteer Income Tax Assistance Program at 1-800-906-9887.  The AARP also has a tax counseling service  at 1-888-227-7669.  This is especially intended to give those individuals who recieve Social Security benefits the ability to "apply" for the rebate by filing the return.

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