Proposition 8: The law requires the Assessor to annually enroll either a property’s Proposition 13 value (factored for inflation no more than 2% annually), or its current market value as of January 1 (lien date) of each year, whichever is less.  When the current market value replaces the higher Proposition 13 value on the roll, that lower value is commonly referred to as a “Prop 8 Value.”

Once the property is assessed under Proposition 8, its value may go up or down or stay the same each year in tandem with market value.  In those areas where market values have increased, Proposition 8 values may also increase to approximate current market levels.  It is important to understand that in no case may the Assessor value a property higher than its Proposition 13 factored base year value.

Property values throughout Riverside County have steadily declined in value beginning in early 2007.  The Riverside County Assessor-County Clerk-Recorder’s Office has tracked this decline and is actively reflecting the reduced values in property tax assessments.

Proposition 8 requires that any property whose market value, as of January 1, has declined below the current tax roll value shall be reduced to the lower value.  The Riverside County Assessor is currently reviewing all residential properties in the county to determine if, as of January 1, 2008, their current market value has declined below the Proposition 13 tax roll value.  Those properties found to be below the roll value will be automatically reduced.  Property owners will be mailed value notice letters in July and reductions will be reflected on the 2008-09 tax bills mailed in late 2008.

Property owners who have questions regarding their property tax assessment or who wish to file a Request for Review Decline- in -Value Reassessment Application (Prop. 8) may contact their respective County Assessor-Recorder. The Riverside County Assessor-County Clerk-Recorder may be reached at (951) 955-6200, 800-746-1544 or visit the website at www.riversideacr.com. (Source: Larry W. Ward, Riverside County Assessor-County Clerk-Recorder)

The VA Home Loan Reform Bill, H.R. 4884, the “Helping Our Veterans to Keep Their Homes Act of 2008” passed favorably in the House Veterans Affairs Committee, Subcommittee on Economic Opportunity.  This bill, sponsored by Representative Filner of California, will reform the VA loan program so that it is able to adequately serve the many deserving veterans who could use its benefits.

The bill does 3 major things:
1. permanently increase the VA loan limits to 175% of the Freddie/Fannie limits (currently that would be equal to $729,750);
2. streamline refinances for veterans by eliminating the equity requirement and raising the refinancing loan limits to the same level as the purchase loan limits; and
3. extend the authority of VA to offer Adjustable Rate Mortgages (ARMs).

Many Adjustable Rate Mortgages (ARMs) start with a lower introductory rate that adjusts periodically (typically once a year for prime loans, twice a year for subprime loans) after an initial period of two, three, five or 10 years.  ARMs generally are tied to a Treasury or London Interbank (Libor) index, with the mortgage rate typically set at 2 to 6 percentage points above that index rate.  The good news is that Libor rates have been stable, thanks in part to the actions of the Federal Reserve to lower interest rates.  Without the Fed’s rate cuts, more than $100 billion in subprime ARMs would have jumped at least two percentage points.  Now, only about $60 billion in these mortgages will adjust up by more than two points.

The California Association of Realtors® reports that home sales decreased 24.5 percent in March compared with the same period a year ago, while the median price of an existing home fell 29 percent.

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