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Get The Information You Need From Tax Agencies, When You Need It

Obtaining accurate information from the various taxing agencies can be, in itself, taxing. Each agency operates differently, with some handling real estate taxes from end-to-end, while others manage only a portion. When taxes become delinquent or go to tax sale for example, many agencies will send the bill to a third party to be collected. To further cloud the waters, the different agencies may also use their own specific terminology for what happened to the taxes or where to locate the appropriate information. However, servicers can help expedite and streamline the information gathering process.

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When trying to obtain accurate and current tax information, servicers should prepare and organize what information is needed before calling the agency. This will prevent wasted time for everyone involved. Also, keep in mind that most tax agencies are extremely busy around collection time and are less willing to work with companies if they call without adequate preparation or a clear understanding of what is needed. Some agencies can go so far as to block a company from calling again. When this happens, companies lose the ability to gather the required material and must go through other, less efficient routes such as mailing the request in or even making an in person visit to the agency.

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Streamline, Don’t Complicate

By being proactive and working closely with the taxing agencies, companies can prevent an information bottleneck and ensure that communication is being fostered. Most importantly, it ensures that the information obtained is correct and up-to-date. Here is what you do before contacting an agency:

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1.) Gather all tax information available, such as the parcel number, homeowner’s name and address.

2.) If possible, familiarize yourself with some of the specific agency’s terminology. For instance, some other common terms for “tax sales” are lien, tax title, tax taking, in rem, tax foreclosure, forfeiture, tax deed, certified sale, tax suit, upset sale, judicial sale. Its important to stay abreast of what an agency uses to prevent miscommunication.

3.) Perform any website searches first to see if it can help you in the information gathering process. Be prepared to have information ready to validate with the tax office. When using a website, do not assume that all information is listed and up to date. It may be necessary to contact the tax office and ask:

>>Does the website provide delinquent tax and tax sale information? If the answer is no, you need to always call to verify delinquency/tax sale details.

>>If taxes are listed as paid, does the website provide the payers name? If the answer is no, you need to call to verify who paid the taxes.

>>How often is the website updated?

>>Are there other websites you should reference to obtain delinquent or tax sales information?

4.) Prepare a script to direct the conversation in order to get all the data needed in the most efficient manner. When calling an agency for the first time, open the conversation by being professional, positive and polite. If you can build a relationship with the person you speak to at the agency, it could result in help with future inquiries and a more streamlined process.

5.) Have questions prepared such as why are you calling and what you need from the agency? Try to stay away from stand-alone “yes” or “no” questions, and instead, ask leading questions for more detailed answers, such as:

>>Do you collect your delinquencies? If not, then you must get the name and phone number of the appropriate party to contact. If the agency does collect delinquencies, then the next question should be, “Are the taxes delinquent?” If you are told all taxes are paid, make certain to ask if taxes were paid at tax sale or by a third party.

>>Were taxes paid at tax sale?

If they were, then when were taxes sold?

Can we still redeem taxes?

When does the redemption period end?

What is the redemption amount?

6.) If time allows, and if the agency will comply, request that the agency send you a document that breaks out any amounts owed so that there is no room for error with the amounts being obtained.

There are a number of unique challenges when working with the different taxing agencies around the country, but understanding the organizational nuances and procedures can help to overcome these hurdles to ensure cooperation and success.

About The Authors

Louise Byrnes (left) and Shelley Lucas
(Left) Louise Byrnes, vendor manager, is responsible for the research of claims and lost properties at LERETA, a leading national real estate tax and flood service provider. (Right) Shelley Lucas, vice president, Tax Operations, has more than 25 years of industry experience. She currently oversees the management of agency and other proprietary information for LERETA, a leading national real estate tax and flood service provider.

The Truth About Taxes

Some of you may be familiar with the old adage, you only have to do two things in life, die and pay taxes. While some people might add working out and watching your gluten intake, paying taxes still remains very true. For property taxes to be paid correctly, it is crucial for servicers to set up loans correctly on their system during the boarding process. Not doing so could lead to penalties or even the loss of a property.

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The tax line is a record in a loan servicing system that includes all the data needed to identify when property taxes need to be paid, the amount of payment and what jurisdiction receives the payment.

tme916-your-voice-chart-two

The following charts represent the monthly number of items and dollar amounts for occurrences of paying the wrong amount of property taxes. The information is based on LERETA national data from prior servicer/lender acquisitions from July 2015 through April 2016.

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One important area to be cognizant of is the tax line, which includes all the data needed to identify when property taxes need to be paid, the amount and the jurisdiction to receive the payment. The line includes:

tme916-your-voice-chart-one

>> The tax payee code is the unique number assigned to identify the tax collection jurisdiction on the servicing system. This code cross-references to another file that includes the taxing jurisdiction name and mailing information.

>> The tax identification number is the actual number assigned to the property by the taxing jurisdiction and is required when obtaining any information from the taxing jurisdiction about the property.

>> The disbursement amount or last amount paid is the last amount paid to the taxing jurisdiction for this tax line (can be an annual or installment amount) and is updated with the current amount to be paid when new taxes become due.

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>> The due date is the date the servicer assigns to this line to alert them to an upcoming payment requirement (this date is based on business rules and is generally 15 to 30 days before taxes are due to the taxing jurisdiction).

>> The type is a code that identifies the type of taxes due, typically county property taxes, city taxes, school taxes and some non-standard payees, such as sewer taxes, garbage taxes, ground rents, etc. Servicers are required to report escrow payments annually to borrowers, and the tax type is used in preparing tax deductions on the borrower’s income tax return.

>> The term is used to identify the frequency the taxes are being paid, for example a Term of three indicates the annual taxes are being paid every three months, or quarterly (three months x four installments = 12 months).

>> Other codes as determined by the business rules of the servicer.

Servicers cannot rest on their laurels once the tax line is set up on a loan. It is extremely important that tax lines are monitored and maintained to ensure the accuracy of the data due and to any potential changes. Those changes could include new payees or the consolidation of taxing jurisdictions that no longer collects taxes, and how they are now collected by the county or separating taxing jurisdictions (a city decides to collect its own taxes instead of them being included by the county). There could also be changes in the due dates, contact information or tax identification numbers.

Servicers can either take on the responsibility of managing this process or work with a tax service vendor that can offer and facilitate the tax line setup and tax line audit services on behalf of the servicer. Either way, the taxes have to be paid correctly, else penalties will be incurred, which no one wants to happen.

About The Author

Ted Smith
Ted Smith is a vice president and client relations manager at LERETA. He has been with the company for nearly 17 years. Since 1986, LERETA has provided the mortgage and insurance industries the fastest, most accurate and complete access to property tax data and flood hazard status information across the U.S. LERETA is committed to giving customers extraordinary service and cost-effective property tax and flood solutions. LERETA’s services are designed to increase efficiency, reduce penalties and liabilities and improve processes for mortgage originators and servicers. LERETA’s dedicated teams of real estate tax and flood professionals along with LERETA’s experienced management team allow the company to lead the industry in service and technology.

Getting The Lines Straight

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Some of you may be familiar with the old adage, you only have to do two things in life, die and pay taxes. While some people might add working out and watching your gluten intake, paying taxes still remains very true. For property taxes to be paid correctly, it is crucial for servicers to set up loans correctly on their system during the boarding process. Not doing so could lead to penalties or even the loss of a property.

Featured Sponsors:

 

The tax line is a record in a loan servicing system that includes all the data needed to identify when property taxes need to be paid, the amount of payment and what jurisdiction receives the payment.

tme916-your-voice-chart-two

The following charts represent the monthly number of items and dollar amounts for occurrences of paying the wrong amount of property taxes. The information is based on LERETA national data from prior servicer/lender acquisitions from July 2015 through April 2016.

Featured Sponsors:

One important area to be cognizant of is the tax line, which includes all the data needed to identify when property taxes need to be paid, the amount and the jurisdiction to receive the payment. The line includes:

tme916-your-voice-chart-one

>> The tax payee code is the unique number assigned to identify the tax collection jurisdiction on the servicing system. This code cross-references to another file that includes the taxing jurisdiction name and mailing information.

>> The tax identification number is the actual number assigned to the property by the taxing jurisdiction and is required when obtaining any information from the taxing jurisdiction about the property.

>> The disbursement amount or last amount paid is the last amount paid to the taxing jurisdiction for this tax line (can be an annual or installment amount) and is updated with the current amount to be paid when new taxes become due.

Featured Sponsors:

>> The due date is the date the servicer assigns to this line to alert them to an upcoming payment requirement (this date is based on business rules and is generally 15 to 30 days before taxes are due to the taxing jurisdiction).

>> The type is a code that identifies the type of taxes due, typically county property taxes, city taxes, school taxes and some non-standard payees, such as sewer taxes, garbage taxes, ground rents, etc. Servicers are required to report escrow payments annually to borrowers, and the tax type is used in preparing tax deductions on the borrower’s income tax return.

>> The term is used to identify the frequency the taxes are being paid, for example a Term of three indicates the annual taxes are being paid every three months, or quarterly (three months x four installments = 12 months).

>> Other codes as determined by the business rules of the servicer.

Servicers cannot rest on their laurels once the tax line is set up on a loan. It is extremely important that tax lines are monitored and maintained to ensure the accuracy of the data due and to any potential changes. Those changes could include new payees or the consolidation of taxing jurisdictions that no longer collects taxes, and how they are now collected by the county or separating taxing jurisdictions (a city decides to collect its own taxes instead of them being included by the county). There could also be changes in the due dates, contact information or tax identification numbers.

Servicers can either take on the responsibility of managing this process or work with a tax service vendor that can offer and facilitate the tax line setup and tax line audit services on behalf of the servicer. Either way, the taxes have to be paid correctly, else penalties will be incurred, which no one wants to happen.

About The Author

Ted Smith
Ted Smith is a vice president and client relations manager at LERETA. He has been with the company for nearly 17 years. Since 1986, LERETA has provided the mortgage and insurance industries the fastest, most accurate and complete access to property tax data and flood hazard status information across the U.S. LERETA is committed to giving customers extraordinary service and cost-effective property tax and flood solutions. LERETA’s services are designed to increase efficiency, reduce penalties and liabilities and improve processes for mortgage originators and servicers. LERETA’s dedicated teams of real estate tax and flood professionals along with LERETA’s experienced management team allow the company to lead the industry in service and technology.