For Immediate Release: Contact: Rachel Wolf
February 1, 2011 202.331.2120
Coalition Applauds FHFA for New Rule to Regulate Financial Scheme that Threatens Homeownership
Private transfer fees infringe on property rights and hurt homeowners
Washington, DC –Members of the Coalition to Stop Wall Street Home Resale Fees applaud the Federal Housing Finance Agency (FHFA) for issuing a proposed rule today to restrict government-sponsored enterprises from investing in mortgages with private transfer fees, a new legally dubious financial scheme that forces homeowners to pay a fee to sell their homes and steals home equity from consumers. The proposal is part of the official rulemaking process.
“We applaud the FHFA for recognizing the dangers of private transfer fees and taking the necessary steps to ensure that this financial scheme does not make further inroads into our country’s real estate market via Fannie Mae, Freddie Mac and Federal Home Loan Bank mortgage purchases,” said Kurt Pfotenhauer, CEO of the American Land Title Association. “FHFA’s decision enhances consumer protection and guards our fragile housing market from unnecessary financial risks.”
Wall Street Home Resale Fees are incorporated into home covenants that filter money from homeowners to private third parties that have no ongoing relationship with the property. The scheme adds language to home purchase contracts requiring that a percentage of the final sales price of a home be paid to private third parties every time the property is sold, typically for 99 years. The fees defy the long-standing principle in real estate law that any covenant that burdens the land must also benefit the land and infringe on homeowners’ property rights.
Wall Street Home Resale Fees have already been restricted in 19 states—and there is legislation pending in multiple states across the country to ban the fees.
Freehold Capital Partners claims that there is $600 billion in real estate across the country subject to the fees, but has yet to release any information to the public about where these properties are located or who benefits from the fees they produce. The company announces business contracts on a state-by-state basis, but does not release the names of their business partners or the developments that are burdened by private transfer fees.
Homeowners and their allies have found that the fees steal home equity from consumers, filter money away from communities and community development, infringe on property rights, and interfere with the safe and efficient transfer of real estate.
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The Coalition to Stop Wall Street Home Resale Fees organizes to fight the dangerous financial scheme of transfer fee covenants and to protect homeowners across the country. Together, we are fighting to ensure that homeowners keep full equity in their home, and have the freedom to buy or sell their home without paying-off a private third party.
For more information, go to www.stophomeresalefees.com
