Neeta has a point but here are a few basics about civics and taxes. Property taxes fund primarily the things you see locally, police, fire, schools, streets (non freeway), jails, and some forms of welfare. If the rate is over 1% for things like mello roos or bonds, the money is for something specific that was likely voter approved or only for that neighborhood that the developer didn’t pay for. The state takes a chunk and funds the schools and courts, county takes a chunk for jails, D.A. whether the house is in a city or in an unincorporated area a chunk goes to pay for police, fire, paramedics and streets for that area. All of those entities get a raise when the house changes hands and they all hate the guy who lives in his house for thirty years and pays very little in taxes. If someone bought a house in La Jolla during the 1980’s they may have paid 100k, their tax bill is incredibly low. If they refi, the taxes don’t go up. Lets say it’s worth a mil and was heloc’d to a mil, today the taxes are about 2k a year, if it forecloses and sells at auction for 750k, now the taxes are 7.5k a year. For every house purchased for 800k that is upside down and sells distressed at 600k there will be an older house that sells at a higher price so the tax collector likes transaction more than values. Even the devlopers that have been sandbagging land and dump it cause the taxes to increase because it sells for more than what they paid but less than what it was worth last year. It is against local government interest to bail out a person who paid 400k and saw their value rise to 600k, refi’d to 600k and loses their house which will be sold by the bank for 500k, the 500k would still cause an increase in taxes because the taxes were based on 400k. Every square inch of dirt is taxed and if you looked at it all, only a small amount changed hands between 2003 and today so it doesn’t make sense to spend tons of money to collect the extra 2k on the house that goes from 800k to 600k.
What you hear from politicians about a bail out isn’t about them protecting their income stream, it’s about propaganda to get votes.
