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ASSOCIATED PRESS
Freddie Mac’s corporate offices are seen in McLean, Va. Freddie Mac was bailed out in 2008 and is now owned by taxpayers.
Thursday, April 19, 2012 | 2 a.m.
Kate Marshall
Sun coverage
The state’s tax department hasn’t decided whether to drop a tax exemption for mortgage companies Fannie Mae and Freddie Mac three months after the state treasurer asked for a change in the rules that would garner an estimated $5 million a year for the state and schools.
A federal judge ruled in a Michigan case last month that Fannie Mae and Freddie Mac owed millions of dollars in county and state taxes that they had not paid when selling homes, according to press reports.
The delay in getting the rules changed in Nevada has frustrated Treasurer Kate Marshall.
“I would think you would have a priority to figure this situation out,” she said. “In my mind, every single day that has passed that we forgo collecting taxes from Fannie and Freddie comes at the expense of Nevada.”
Tax Department Director William Chisel said the department was aware of the federal court decision and is still considering how to proceed.
Fannie and Freddie were created by Congress in 1938 and 1970 to back residential mortgages. Their exemption from Nevada’s real property tax was confirmed in 2008 in a memo issued by the state’s Tax Department after a request for clarification from the Lyon County recorder’s office.
They claim that under their federal charters, they are exempt from state and local taxes. But Marshall argued that the real property transfer tax is akin to a sales tax and not covered by the exemption.
Additionally, Marshall argues in her letter that the companies are not “instruments” of the federal government, which would make them exempt.
U.S. District Judge Victoria Roberts ruled that the entities do have to pay taxes in Michigan and awarded back taxes for the past six years.
In Nevada, officials said the real property transfer tax yields about $500 on the sale of a $100,000 home in Clark County. The tax is divided among the state, county and the Clark County School District.
Regardless of her good-intent, why is the State Treasurer making policy?
Both Fannie Mae and Freddie Mac have abused their quasai power by self defining themselves exempt from the RPPT when they receive a property in foreclosure. A Bank pays it when they foreclose on an FHA Loan and turn over the property to HUD for full reimbursement of the foreclosed loan. All three; Fannie, Freddie and HUD then require the home Buyer to pay the RPPT when they sell it, instead of paying it themselves like most home sellers do. There should be no exemption from the RPPT to be paid by the selling party on a housing transaction other than that of changing a vesting, Trust, direct family member transfer or name change. Transactions that do not bring "new money" to the table to transfer a property. It is the ineptitude of the current elected officials and their unwillingness to go to the mat on this one that makes me wonder if their isn't some other "monetary" reason for not pursuing this revenue stream.
Our State, if you have not noticed, is headed toward a very difficult period revenue wise. And with these lack luster attempts to have certain select entities pay the RPPT by just allowing them to bypass this payment because of who they are is another reason why the Legislators are always having to come to the TAX THE PEOPLE & BUSINESS well. Let's try a new and novel approach. Let's have the State collect the tax revenue due to the State from the RPPT from Fannie and Freddie, so they don't have to ask the citizens and business owners to continue making up the differance for the States obvious inability to collect these taxes that are already due the State.
"Fannie and Freddie were created by Congress in 1938 and 1970 to back residential mortgages."
Yet at least Fannie is behind many if not most foreclosures. So an entity owned by We the people is the main culprit behind putting thousands of Nevada homeowners out of their homes without a bona fide claim to them.
Then there's the really, really big storm coming at us over the horizon -- MERS. At least one of "Fannie and Freddie" were behind creating it along with several big banks, the purpose being to screw counties out of their recording fees. The result was to hide the many, many transfers of mortgage notes which until then were clearly revealed on the public record. With MERS on the trust deeds all non-judicial foreclosures could very well be declared voidable. Then the suits can start another feeding frenzy to play out in courtrooms everywhere.
And guess who gets screwed in the process again.
"The regulators got bailed out, the middle class lose their jobs and their houses. All this desire to trust in the government to make sure that big corporations won't hurt them actually is a backfire on them." -- Rep. Ron Paul to Jon Stewart 9/26/11, citing the example of the real estate crash as example of government regulation gone bad
So once again, where is our Attorney general?
Every time, as a real estate agent, that Freddie Mac makes it a requirement that the buyer pays this. It is part of negotiations. Buyer agrees to it. Property owner who have Bank of America, Chase or Wells Fargo may find benefit by checking out http://2walkaway.com. No hardship required.
Hmmm.... maybe until Fannie Mae and Freddie Mac start paying their property taxes then no police or fire services should be provided to protect all of their vacant homes.
Nobody else gets a tax exemption... Fannie Mae and Freddie Mac should certainly not be getting tax exemptions. They take forever in making decisions to allow Las Vegas Homeowners move on in life when doing the right thing and short selling.