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Tuesday, 07 December 2004 |
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Mortgage Shock VIDEO - Round Rock residents struggle with mortgages Several homes in Round Rock's Chandler Creek subdivision are up for sale. Families are moving out because they can't afford the house payments. KB Homes developed and financed the property… It's a common practice used to get homeowners in quickly and at a low cost.
Round Rock residents struggle with mortgages 8/2/2004
By: James Keith
Watch The Video
Channel 8 Austin – Residents in Chandler Creek didn't plan for an increase on mortgage payments for property taxes.
Several homes in Round Rock's Chandler Creek subdivision are up for sale. Families are moving out because they can't afford the house payments.
Homeowner Falesia Swann worries about paying the bills. Her family pays $1,200 a month for its house in Chandlers Creek.
Her mortgage company, Citi Mortgage, wants $600 more a month.
"I thought it was a joke, a huge joke,” she said. “I just didn't believe it."
KB Homes developed and financed the property. Payments were set before construction and were based on property tax value without a home. But the price changed after construction.
It's a common practice used to get homeowners in quickly and at a low cost.
Property taxes
Residents of Chandler Creek were caught off guard with higher mortgage payments because of property taxes.
The Williamson County Tax Appraisal District said the situation is unfortunate but legal. Experts recommend reading the fine print before signing any mortgage agreements.
"When they build a home on that lot, you obviously have improvements and those improvements will be taxed by the appraisal district and the improvements will be subject to additional insurance costs,” said John Heasley of the Texas Bankers Association.
Two weeks after closing, KB sold the mortgage to Citi Mortgage, which determined new payments based on tax values with a home. That's why payments were increased.
Citi Mortgage could not be reached for comment.
"There will be a lag period before the homeowner will see increased costs,” Heasley said. “Some of that will depend on the lender, some of that will depend on the appraisal district."
It took Citi Mortgage almost two years to notify neighbors. The company wants the increased payments and two years of back taxes paid immediately.
"Give us a few months in between to get caught up,” Swann said. “We've got other bills also."”
Lots of neighbors have given up and moved; Swann said she'll find a way to stay. |
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