Meisner Suing Fannie Mae and Freddie Mac
(Press Release, 6/24/2011)
Pontiac, Michigan – Oakland County Treasurer Andy Meisner has joined with Oakland County Executive L. Brooks Patterson on behalf of the taxpayers of Oakland County in suing the Federal National Mortgage Association (Fannie Mae) and the Federal Home Loan Mortgage Corporation (Freddie Mac) to recover over $12 million in unpaid real estate transfer taxes on the sale of mortgage foreclosed properties in the County.
“It’s time for those who caused the foreclosure crisis and the enormous drops in Oakland County property values to pay their fair share,” said Oakland County Treasurer Andy Meisner. “Oakland County taxpayers shouldn’t have to pick up the tab to clean up Fannie and Freddie’s mess.”
Under Michigan’s real estate transfer tax, counties receive $1.10 per $1,000 of value and the State receives $7.50 per $1,000 of value per transaction. The Oakland County lawsuit is based on around 200 real estate transactions over the course of 6 years, each at an average of $100,000 per transaction. In each of these transactions, Fannie Mae and Freddie Mac claimed a governmental exemption to the real estate transfer taxes even though the companies are private, for-profit corporations whose stock is traded on the New York Stock Exchange.
“If it walks, flies and quacks like a duck, it’s a duck,” said Meisner. “In this case, Fannie and Freddie walk, fly and quack like private companies, right down to the multi-million dollar salaries for their CEOs. That means that they are not entitled to exemptions made for government entities.”
Oakland County Corporation Counsel Judith Cunningham, outside council Bill Horton and Ken Robinson, and Meisner have been developing the legal strategy for months. The lawsuit was filed on Monday, June 20, 2011 in the United States District for the Eastern District of Michigan, and has been assigned to Judge Victoria Roberts.
“It will take decades for Oakland County to dig out of the mess caused by the foreclosure crisis,” said Meisner. “In addition to aggressive mortgage foreclosure prevention and maintenance of foreclosed properties, this suit is part of our broader strategy to turn things around.”
Additional suits targeting other responsible parties for the foreclosure crisis are likely including financial institutions, mortgage lenders and the Mortgage Electronic Registration System (MERS), which has been used by the mortgage industry as a tax and fee avoidance vehicle.
