Florida counties sue GSEs over real estate transfer taxes
Karen Nicolai, clerk of the Hernando County Circuit Court in Florida, filed a federal lawsuit against Fannie Mae and Freddie Mac seeking to recover at least $75,000 in real estate transfer taxes the mortgage giants avoided.
The suit seeks class-action status on behalf of 66 other counties in Florida. It also names the GSE's regulator, the Federal Housing Finance Agency, as a defendant.
The documentary stamp tax must be paid to the county when interest in a real estate property transfers. Fannie and Freddie claimed exemption from the tax because they are considered themselves government entities.
The Treasury Department has spent more than $183 billion in propping up Fannie and Freddie since they entered conservatorship in 2008. Both firms have paid back $44.9 billion in dividends.
"Defendants Fannie Mae and Freddie Mac are federally chartered private corporations and not government entities," according to the suit. Defendant's federal law exemption from certain taxes does not include the transfer tax."
Clerks of courts in seven states filed similar lawsuits against the GSEs, according to Fannie Mae's first-quarter earnings report. In March, a federal district judge in Michigan ruled the GSEs are not exempt from the transfer taxes based on their charter.
"We believe that none of these seven lawsuits are likely to have a material impact on our business, either individually or in the aggregate; however, these lawsuits may lead to additional lawsuits relating to the more than 30 states that impose these taxes," Fannie said in its quarterly filing.