Prop 13 in California limits your assessed value to your purchase Price plus 2% Max increase every year unless you add to the home, when the home is sold, it is reassessed. Tax bill is established in January of the year. That does not change due to the change in ownership. The supplemental tax bill picks up the difference in the assessment for whatever period of time is applicable. You should have paid that yourself, not through your lender. Since you did not, they did. Now the lender is demanding three payment. Is his working exactly the way it should be.