County sues Fannie and Freddie over transfer tax

The county accused national mortgage giants Freddie Mac and Freddie Mae of lying to evade real estate transfer fees, in a federal lawsuit filed Monday.

  • Macomb County and county Treasurer Ted Wahby claim in the complaint filed in U.S. District Court in Detroit that the pair of entities failed to pay the fee as both the “grantor” and “grantee” on deed transfers and mortgage transactions here.
  • The county contends the two entities falsely claimed they were exempt from the transfer tax because they’re part of the federal government, sometimes citing state law and other times citing federal law. However, “Fannie Mae and Freddie Mac are federally chartered private corporations and not government entities,” the county says in the lawsuit.
  • Freddie Mac and Freddie Mae — sometimes called the FMs — were created decades ago to back the mortgage market. In 2008 during the financial crisis, according to reports, the FMs were taken over by taxpayers and appointed a conservator, the Federal Housing Finance Agency, which is named in Macomb’s lawsuit. The takeover followed $30 billion in losses due to bad mortgages.
  • Macomb officials say in the lawsuit that when the FMs presented sheriff’s deeds in lieu of foreclosure at the Macomb County Register of the Deeds, they “stated on the face of the deeds” they were exempt, the lawsuit says.
  • “The statement by defendants Fannie Mae and Freddie Mac that the deeds were exempt from the county Transfer Tax was false in fact,” the complaint says. “(The Register of Deeds) recorded the deeds without collecting the Transfer Tax because they were actually deceived by and acted in reliance on the statement from defendants.”
  • Read on.

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