Hennepin County sues Fannie and Freddie Mac for 10 million
Aug 24, 2012 (Star Tribune (Menafn - Minneapolis) - McClatchy-Tribune Information Services via COMTEX) --Hennepin County has filed a federal lawsuit against Fannie and Freddie Mac, saying the mortgage lenders shortchanged Minnesota counties millions of dollars by failing to pay the state's deed transfer tax.
The suit seeks more than 10 million.
The lenders acquired an unusually large number of properties through foreclosure in recent years and later resold them, the county said. But Fannie and Freddie Mac argued that they did not have to pay the fees to transfer ownership of the homes because Minnesota law exempts the U.S. or any of its agencies from paying those taxes, and the federal charter for the corporations says they are exempt from state and county taxation.
Hennepin County is following the lead of Oakland County, Michigan, which filed a similar lawsuit and won. In March, a U.S. District Court judge for the Eastern District of Michigan ruled that the federal law exempting those lenders from "all taxation" does not refer to real estate transfer taxes.
Other local governments in North Carolina, Ohio, Connecticut, Florida, Illinois, and other states have filed similar lawsuits in recent months.
Minnesota receives 97 percent of the deed transfer tax revenues, and the counties keep 3 percent to recoup the cost of collecting the taxes. The Hennepin County lawsuit seeks a judgment that would require Fannie and Freddie Mac to pay deed taxes they would have owed since February 2006, interest on the unpaid taxes and attorneys' fees.
The suit also seeks a ruling that the corporations cannot claim such an exemption in the future.
Maya Rao --612-673-4210
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