I hope you guys have PROTECTED your assets

[HURRICANEBOB]

That 200,000 home has been devalued, but the mortgage is still there,so who,s going to foot the biggest part of the banking loss?Three guesses, NOT the banks.

Along that lines. The value of the home for tax purposes is based on the last selling price. The foreclosed property in a declining market, for tax purposes gets taxed at the higher last selling rate, vs its current devalued worth. Once it sells at the lower price, than that lower price becomes the basis for future taxes. So the govt gets less property tax revenue until property values increase, and the home is apparasied by the tax folks and the taxable basis raised again.

When the bank forecloses, it becomes the new owner, and the bank owes all property taxes due. Banks normally recoup that thru the sale of the foreclosure. Most banks ask for the taxes due to be "deferred" until the property sells. Most tax districts agree with that, knowing that if the bank refuses to pay the taxes, the city tax folks then have to put a lien on the proerty, and wait for it to sell to get there money anyway. Some tax districts will reapprais the property in lieu of the devalued market, lowering th property taxes due, and therefore making it easier for the bank to sell the foreclosed property. That course, again means the tax district gets paid sooner, but less.