Supplemental Taxes Explained

Since your mortgage payment includes Property Tax and Homeowners’ Insurance, you will not need to pay any additional/extra for your Property Tax since we are calculating it based on today’s Los Angeles County tax rate (however this may change in the future depending on what the government/state officials decide to do).

I would like to make sure you understand the Supplemental Tax Bill completely.  Often, your current lender will transfer your mortgage to another mortgage servicing company or a new lender who will check your monthly mortgage payment for accuracy and compare payments collected.  Property Tax is one of the most important items which will definitely get reviewed to make sure the new lender is collecting enough to cover your Property Tax payment when it becomes due.  When the lender performs this review, if the City has not updated its portal to reflect the new tax amount due after you have purchased the property, the lender may automatically lower your total monthly mortgage payment to match the Property Tax that the City is reporting resulting in a refund to you of the extra amount collected.  Sometimes, the City may take up to a year to adjust its numbers and once adjusted, the record will be updated and you will receive a Supplemental Tax Bill.

If you receive an overage refund from your lender, please make sure to keep those funds available as that amount is the excess between what you have paid to your lender for Property Tax vs. what the City is reporting to your lender. Since you will end up receiving a Supplemental Tax Bill, you will be responsible for submitted the appropriate payment.

Ultimately you will receive your Supplemental Tax Bill from the City when it updates its records.  If your lender has issued you a refund for the excess of the tax portion, please make sure you make the payment to the City directly and provide the statement and proof of payment to your lender.  If you have not received a refund from your lender, please contact them immediately, provide a copy of the Supplemental Tax Bill that you have received and get confirmation that they will make that payment for you.

More information http://lacountypropertytax.com/portal/list/faq.aspx?faqID=47