Not joking: “Use a reverse mortgage to pay your property taxes”

Sometimes we highlight something here on SGW just because it’s so revealing of a mindset. That’s the case with this opinion article that ran on the environment-focused blog Sightline.

In an argument in favor of Seattle’s latest affordable housing levy, the author dismissed concerns about rising property taxes pricing people on fixed incomes out of their own homes – and he has a unique suggestion for dealing with the problem:

“Second, the robust, long-term appreciation of homes in Seattle gives homeowners with limited means the option of borrowing against their equity to cover unanticipated expenses. Home equity can be converted to cash through refinancing, a home equity line of credit, or a reverse mortgage. The cost of the levy is so paltry compared to Seattle’s historic home value appreciation that a very modest loan would cover it, and ongoing equity gains would provide a long-term cushion to pay back loans.”

Isn’t that incredible? His suggestion to those struggling to afford their property taxes is to take out a reverse mortgage or home equity line of credit to pay them off. He calls it “surely not the most palatable idea to most people” but a “realistic solution”.

As long as we’re going down that road, why not a payday loan? That can help pay off what you owe. Or maybe you can hock some family heirlooms – after all, you can get them back if you pay off the pawn shop in time.

Or maybe people on fixed incomes are just supposed to accept their fate and sell their home. That way government will get even more revenue through the real estate excise taxes on the sale.

Not surprisingly for someone who suggests reverse mortgages as a reasonable way to pay off property tax bills, the author is also no fan of the voter-approved 1% growth limit on property taxes. Perhaps he doesn’t see the connection between dismissive attitudes toward those who are struggling to stay in their homes and the taxpayer sentiments that led to I-747 in the first place.

People don’t want “solutions” like home equity loans to be able to afford their property taxes. Total taxes already add up to more than Americans spend on food, clothing, and housing combined. If our state’s solutions to the problem are inadequate, then we need to update them, not encourage fixed-income homeowners to take out a loan.
-Rob McKenna

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Rob McKenna
Rob served two terms as Washington’s Attorney General, from 2005 to 2013. He successfully argued three cases before the U.S. Supreme Court and negotiated three of the largest consumer financial protection settlements in national history, all involving mortgage lending and servicing. He is a recognized leader in the development of consumer protections on the internet, in data protection and privacy regulation.