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Order Granting Oakland County’s Motion for Summary Judgment Against Fannie/Freddie FHFA RE Transfer Taxes on Deeds
OAKLAND COUNTY, ET AL.,
Plaintiffs,
vs
FEDERAL HOUSING FINANCE AGENCY
AS CONSERVATOR FOR FEDERAL
NATIONAL MORTGAGE ASSOCIATION AND
FEDERAL HOME LOAN MORTGAGE COMPANY;
FEDERAL NATIONAL MORTGAGE ASSOCIATION;
AND FEDERAL HOME LOAN MORTGAGE COMPANY,
Defendants.
________________________________/
ORDER GRANTING PLAINTIFFS’ MOTION FOR SUMMARY JUDGMENT AND
DENYING DEFENDANTS’ MOTION FOR SUMMARY JUDGMENT
Excerpts
D. An Exemption from All Taxation Covers Only Direct Taxes, Not Excise Taxes
Plaintiffs rely upon the Supreme Court’s decision in Wells Fargo for the
proposition that an exemption from “all taxation” does not cover excise taxes such as
the Michigan Transfer Taxes. 485 U.S. 351. Plaintiffs say that Wells Fargo made clear
that an exemption from all taxation covers only direct taxes, not excise taxes. The
Court agrees.
In Wells Fargo, the Supreme Court considered whether certain items of personal
property–“Project Notes”–were exempt from the federal estate tax. In the late 1930s,
Congress passed the Housing Act, 50 Stat. 888 et seq., which empowered state and
local governments to issue tax-free obligations called Project Notes to finance housing
projects. 485 U.S. at 353. Congress provided that “[Project Notes], including interest
thereon, . . . shall be exempt from all taxation now or hereafter imposed by the United
States.” Id. at 355. Discussing the exemption, the Supreme Court stated:
Well before the Housing Act was passed, an exemption of property from all
taxation had an understood meaning: the property was exempt from direct
taxation, but certain privileges of ownership, such as the right to transfer the
property, could be taxed. Underlying this doctrine is the distinction between an
excise tax, which is levied upon the use or transfer of property . . . and a tax
levied upon the property itself. The former has historically been permitted even
where the latter has been constitutionally or statutorily forbidden. Id.
After reviewing the case law, the Supreme Court held that the exemption from all
taxation did not exempt the Project Notes from excise taxes such as the estate tax. The
Court noted that where Congress had, on other occasions, exempted property from
estate taxation, it generally referred specifically to the estate tax rather than to “all
taxation.” Id. at 356.
In reaching its conclusion, the Court reviewed over eighty years of Supreme
Court case law holding that excise taxes have historically been permitted, even when
tax on the property has been forbidden.
...
IV. CONCLUSION
In the end, this case turns on a single question: whether a statutory exemption
from “all taxation” includes excise taxes such as the Michigan Transfer Taxes. Wells
Fargo dictates that it does not. Accordingly, the Enterprises are liable for the Transfer
Taxes.
Plaintiffs’ and State Plaintiff’s motion for summary judgment is GRANTED.
Defendants’ motion is DENIED. The issue of damages remains.
IT IS ORDERED.
Full order below...
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transitory
Sorry to piss in the punch bowl, but banks do not enjoy an exemption from transfer taxes. The federal exemption argued here only applied to Fannie and Freddie. So, no bankstas are crying in their beers over this ruling. It has no effect on them. They have already been liable for and have been paying transfer taxes on property they acquired by foreclosure on deeds in lieu. In fact, one of my favorite sports is bidding property up at foreclsoure sales so the banks have to pay greater transfer taxes. I just call it supporting the state coffers.
There is no spoon.
I've become increasingly convinced that nothing of any consequence will ever happen to those who control our money and the law. Each can be conjured and altered at their whim. It will be ignored or retroactively nullified.
You can count on that.
Who is the County Treasurer going to call when Fannie/Freddie don't pay up? A collection agency?
They could put a lien on the White House or Yellowstone National Park. That way when the US has to privatize assets in a Greek-style restructuring, they have first priority to the proceeds.
Hey, they better leave the national parks alone. I don't want any cartoon bears stealing my unguarded picnic baskets.
Agreed. Jellystone National Park is off limits.
I believe I read that some of the houses in Florida were sold 600 times with only a change of computer entry from bank to bank to bank. Does that mean the local county can charge a fee for each sale? It would probably total up to well beyond the fantasy value of the house in some cases.
Call out the lobbyists, bribe the Congress, pass a bill, screw the citizens. Got that Mortimer?
'millions of dollars' how quaint
IMHO this means MERS can't beat the local property transfer tax in this county. Multiply times 3,000 other counties, by however far back the statute of limitations runs and the number of properties transfered.
KA-BOOM is Korrect!
Even if this means that MERS is on the hook for local property transfer taxes, going back God only knows how far... MERS would probably be able to settle the whole mess for like twenty bucks and a few campaign contributions. They won't end up paying anything close to a fair resolution.
case by case, facts by facts... if your county has exactly the same rules on the books as this one... AND the exact same fact pattern... AND from a controlling authority, then you might be getting somewhere... until that day, it's persuasive authority of a far away land...
the real issue is that the local governments are arms of the state... the same state and local government that supports and/or pays for the salaries of the judiciary that decides these issues... that's why counties will win... because the judges are inherently biased. Even federal judges, who live in a particular state, grew up there, have ties there, and will retire there, are compromised... It's the classic battle of the yokel vs. the outsider with money. We know how this one ends.
The fact that the Banksters flouted 500 years of Common Law in their dealings also makes the decision by said Judges a "no-brainer!"
Yeah, so how is this a game changer?
It's a possible game changer down the line because evetually it may get to the MERS (banks), which was created in large part to get out of some of these fees. Then MERS says it doesn't own the RE. Then it says it does when foreclosues come up. It's a total mess. Think of all those transactions over the last several years.....you do the math. Fannie/Freddie are just the first. Denninger was on this years back. He appears to be validated. Bottom line....counties are broke and want their money owed. As in now. The IRS may be next in wanting a slice of cash too. Of course, I believe the banks will get bailed out of any serious trouble this may cause, at our expense.
Eventually, taxpayers will get screwed harder.
Every dollar a bank loses costs the public two.
Mushroom Clouds are ( antiquated)<>
what does this mean?
"Accordingly, the Enterprises are liable for the Transfer
Taxes."
Means Fannie and Freddie are liable for the excise taxes when they transfer title. Thye have to pay up is what I take it to mean...good for the county...bad for taxpayer since Timmy said tapyers will stand behind the almost $1 Trillion Fannie/Freddie laibilities.
I would like ot hear other comments...ramifications.
transfer taxes are generally the obligation of the purchaser... (for example, on virtually every deed there is a grantee signature line that "swears" the proper amount of transfer taxes have been paid). However, the parties are free to agree amongst themselves as to who pays. In other words, prior to paying the transfer tax, one party might at closing have the transfer taxes withheld from its portion of the proceeds.
Seems to me that, in large part, the buck stops with fannie and freddie. The two most likely alternatives would be if the parties agreed the grantor (banks) were going to pay the tax (fat chance) or if somehow there is fraud or other representations on the part of the grantor regarding the taxes that render the grantor liable...
The government, as stewards of the public's money, HAVE to seek putbacks of this shit... and, with the putbacks, will also come the obligation to pay the transfer taxes... I can't fathom how the GSEs get to keep toxic assets on their books they know to have been illegally created... to their own (our) detriment.
The taxing authority will always get its due...
Still.....I just don't see any of the 'big boyz klub' banks being made to pony up this kind of money. Either the rules will be changed, and some sort of retroactive chump-change 'fine' will be levied in exchange for granting blanket settlement....or the taxpayer will be put on the hook (as always) for these transfer taxes in the form of another bailout.
I think that as the enigma of "fire and brimstone" becomes more of an enema, the political will to keep backstopping each and every transgression will wane (already has at least in form). I think your premise is correct and it is the default moving forward... however, there is an alternative that is gaining steam... and as each of the transgressions becomes more and more known and explored, each subsequent straw can break the camel's back... given everything is always riding on the here and now... (the inevitable result of poor leadership and management). At some point, nationalization proper will occur... the only question is who gets to pick the spoils and for how much... (thus far, the principal actors are kicking ass on this front).
PS, the universal settlement is only possible on charges brought by the government... the government cannot usurp and step in the shoes of the damaged parties for their private causes of action... these are matters for which the government must fully comensate the damaged parties, should this "taking" occur. This is black letter law... and an act contrary to this would be an objective indicator that everything is broken... and by objective, I mean so fucking obvious that even the sheeple will gulp... something that could not possibly be ignored by the populace (remember, too many people are affected by the foreclosure mess... not just "sophisticated" investors, but J6P).
In California, city and county transfer taxes are paid by the seller.
Poor banks, having to live in our world.
Sounds like the scramble for tax revenue has begun.
Blood from the turnip taxpayer has run dry.
Speaking of turnips...What if the banks are already insolvent?
a) QE (to infinity and beyond)
b) if necessary, direct bailout (TARP 3)
c) measly fine in exchange for blanket settlement of the transfer tax issue (just as they did with the overall fraudclosure settlement)
In other words, the turnips being squeezed are not the banks', but the taxpayers'.
Nationwide "settlement" in ..3..2...1..
One County down, 3,076 Counties soon to follow!
OUCH!
...and that's just for Michigan :)
I believe a good portion of those funds go to public schools.
Say now...what about the firms that were accessories (Trott & Trott, Orlans & Associates) - think those attorneys who filed this paperwork will get in trouble/fined? Doubtful. But, we can hope.
Berkeley California has gotten the bulk of its funding from its transfer tax.
Can someone summarize in plain English?
Orlans Moran - Goons
[edit - I really hate these pricks]
chunga, you should have posting privileges. At least you explain this stuff instead of just copy/paste.
It's going to be jurisdictional given the laws of particular locales differ... but, as I've said all along, the banks are going head first into local taxing authorities that are desperate for cash (the same desperation that caused them to turn their heads when the real estate bubble was blown, but I digress). This is a matter that will be decided locally and, frankly, the banks are going to take it in the ass and on the chin. The same people who have been foreclosed on, lost their jobs, lost their houses (much of which from their own poor decisions, but I digress again) will be the juries deciding these issues... house by house... commercial property by commercial property...
death and taxes
The Peerage ain't what it used to be! What's a po' Bankster to do? :>D
thank you much for the news....i love it when a crook finds a small nuclear device up his butt which is just about to explode.