Ingham County officials expect to see tens of thousands of dollars in new revenue as they begin collecting taxes from two of the nation’s largest mortgage lenders.
Ingham County Register of Deeds Cutris Hertel Jr. said he will begin requiring Fannie Mae and Freddie Mac to pay full transfer taxes on all property transfers in which they are the seller.
The two companies had claimed to be exempt from paying taxes upon filing new deeds, saying they were government entities.
“We’ve been telling them along the way they need to pay on these, but we haven’t had the legal backing until the Oakland County case was decided,” Hertel said.
The county could be in line for a half-million-dollar payout from mortgage giants Fannie Mae and Freddie Mac if a U.S. District Court decision Friday stands up to a likely appeal.
County Treasurer Deb Cherry said today that Friday’s decision by Judge Victoria A. Roberts could provide an unexpected revenue boost to the county and immediately urged that the payout be used to help fix problems that have been created by mortgage and tax foreclosures.
UNITED STATES DISTRICT COURT EASTERN DISTRICT OF MICHIGAN SOUTHERN DIVISION
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
EXCERPT:
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.
S/Victoria A. Roberts Victoria A. Roberts United States District Judge Dated: March 23, 2012
Just breaking and will report when the ruling is released…
The lawsuit, filed in U.S. District Court for the Eastern District of Michigan on 6/20/2011, alleged that Fannie Mae and Freddie Mac failed to pay the real estate transfer tax.
Oakland County Treasurer Andy Meisner stated in twitterverse “Just got word Oakland County has won our lawsuit against Fannie Mae and Freddie Mac, one step in fighting to make our taxpayers whole!”
Michigan Attorney General Bill Schuette has issued a second criminal investigative subpoena against national mortgage servicing support provider DocX as his office continues to investigate questionable mortgage documentation filed with Michigan’s Register of Deeds offices during the current foreclosure crisis.
“We are moving forward with our investigative efforts to find answers on behalf of Michigan homeowners,” said Schuette.
Schuette’s office has requested documents and information regarding DocX operations in relation to foreclosure and/or bankruptcy-related document processing. The subpoena was approved by the 54B District Court in Ingham County, and the information must be provided to the Attorney General’s Office on or before April 4.
This is the second criminal subpoena filed during the course of Schuette’s investigation. Schuette previously filed a criminal subpoena against DocX on June 12, 2011.
1. Did the borrower have a choice or was he/she coerced into accepting MERS, who they really had no idea of what or who it was?
2. Was it ever disclosed that many of the lenders are shareholders of MERS, also who may own the first or second position… this includes Fannie Mae who is a shareholder?
3. Since Fannie (GSE) is owned by “taxpayers” why is she acting 100% private – 100% of the time?
4. One may have been coerced into having MERS in their documents but one would never accept forgery or robo-signing because everyone knows this would be fraud and therefore void the transaction…like a check.
With mounting evidence of robo-signing and other alleged fraud perpetrated by banks, foreclosure law firms and others, Fannie Mae and Flagstar Bank have filed a new defense of such actions in Ingham County Circuit Court — and Ingham County Register of Deeds Curtis Hertel, Jr. is crying foul.
“What they are basically saying is they can forge an assignment and there is nothing the citizen or court can do about it. It is a brazen attempt to legalize robosigning,” says Hertel. “It’s just another example of Fannie Mae thumbing its nose at the American people, and unfortunately while they are under federal bailout we are paying for it.”
This is happening in the case of a Haslett man who suffered a stroke and fell behind on his mortgage payments. As a result, Flagstar Bank and Fannie Mae foreclosed on him and are now in the final stages of evicting him from his Haslett home, says Hertel.
PONTIAC — A free service is now available to people wanting to protect themselves from mortgage document fraud.
The Oakland County Clerk’s Office has launched its Property Fraud Alert Service.
By signing up at the clerk’s office, people will be notified whenever there are documents filed with their names.
Clerk Bill Bullard said the service is an extension of the mortgage document fraud his office has uncovered and referred to local and state authorities for investigation.
STATE OF MICHIGAN
30th CIRCUIT COURT FOR THE COUNTY OF INGHAM
CURTIS HERTEL, JR. individually and as
Register of Feeds for Ingham County,
V
BANK OF AMERICA N.A.;
BAC HOME LOANS SERVICING, LP;
WELLS FARGO BANK, N.A.;
COUNTRYWIDE HOME LOANS SERVICING, LP;
ORLAN ASSOCIATES, PC;
TROTT & TROTT, PC;
FEDERAL NATIONAL MORTGAGE ASSOCIATION
d/b/a FANNIE MAE;
FEDERAL HOME LOAN MORTGAGE CORPORATION
d/b/a FREDDIE MAC
CONTACT: Curtis Hertel Jr. Ingham County Register of Deeds Ph 517 281 3574
Ingham County Register of Deeds Curtis Hertel, Jr. Files Lawsuit Against Mortgage Lenders For Unpaid Taxes
Ingham County Register of Deeds Curtis Hertel Jr. has filed a lawsuit today in the 30th Circuit Court, to recover millions in alleged unpaid transfer taxes from mortgage servicers and their attorneys.
“This is money that should have been applied to the county’s general funds, which could have been used for public safety, health programs, or countless other public services,” said Hertel. “Additionally, the state taxes collected would have gone straight to the school aid fund. It’s time for some of the banks responsible for the foreclosure mess to pay their fair share, instead of allowing our county’s taxpayers to bear all of the burden.”
Transfer taxes are the monies paid when a new deed is recorded in the county’s Register of Deeds office. The taxes apply to the sale price of the property being transferred, unless it falls under $100. Many large-scale banks have used Fannie Mae and Freddie Mac to claim an exemption to the taxes by identifying themselves as government entities, which Hertel contests.
”Depending on the amount of the judgment, this could provide a needed boost to our county’s constrained budget,” said Ingham County Treasurer Eric Schertzing. “The foreclosure crisis has drained county tax dollars in many ways – not merely in uncollected property taxes, but also because Fannie Mae and Freddie Mac were claiming these federal exemptions while re-selling foreclosed homes.”
The official transfer tax rate for counties in Michigan is $1.10 for every $1,000 of value being transferred. So the sale of a $100,000 home would typically carry a $110.00 tax. State taxes on the same transactions stretch even further – $7.50 for every $1,000 of value being transferred. It is estimated that the lawsuit could fetch a judgment in the millions of dollars.
“MFI-Miami, an internationally recognized mortgage fraud investigation firm based in Florida, has been instrumental in assisting in our investigation of this,” said Hertel. William Maxwell, Dan Marsh and Brian Parker from the Home Defense League, PLC, working in conjunction with MFI-Miami discovered a pattern of unpaid transfer taxes on foreclosure sales across Michigan. “The fact is banks and mortgage servicers, in concert with their foreclosure firms, failed to pay state and county transfer taxes,” said Steve Dibert of MFI-Miami, who has been part of the document examination.
Hertel is also working with other members of the Michigan Association of Registers of Deeds. “We are cooperating with other municipalities to join us in this fight, because this not just an Ingham County problem, it a problem that affects all 83 counties in the state.”
“Currently, the Michigan Association of Registers of Deeds, Inc. is compiling data from documents representing taxable transfers from these and other entities to determine the potential amount owed Michigan counties,” said president Bambi Somerlott. “Accordingly, each county will, in its discretion, use the information and proceed as they deem appropriate.”
Hertel has received the support of the Ingham County Board of Commissioners, and will announce the lawsuit at a press conference at 1:00 pm today. He has chosen the site of 1117 S Grand Avenue, a home that was recently subject to tax foreclosure, to make the announcement. “The banks should bear their share of responsibility for our current housing climate, and their role in what has happened is becoming more clear as time passes,” said Hertel. “We will do everything we can to pursue financial justice.”
Public Date: 06/20/2011
Contact: Bill Mullan, Media and Communications Officer
Phone Number: 248-858-1048
Pontiac, MI. — Oakland County Treasurer Andy Meisner and the Oakland County Corporation Counsel will hold a news conference Thursday to announce the filing of a lawsuit against Fannie Mae and Freddie Mac that alleges the two lenders have failed to pay the county a real estate transfer tax for the privilege of recording various documents with the County Register of Deeds. The news conference will be held at 1:00 p.m. Thursday, June 23, 2011 at the Oakland County Treasurer’s Office, 1200 North Telegraph, Pontiac.
The lawsuit, filed in U.S. District Court for the Eastern District of Michigan on Monday, has the potential to recover more than $1 million for Oakland County based on the number of times Fannie Mae and Freddie Mac failed to pay the real estate transfer tax.
The Oakland County Corporation Counsel discovered Fannie Mae and Freddie Mac’s failure to pay after reading an article titled “Bypassing county fees may cost banks” in the December 2, 2010 edition of the Oakland County Legal News. The Corporation Counsel – along with outside counsel Kenneth Robinson and William Horton – began to take a look at real estate transfer taxes on various documents filed with the Oakland County Register of Deeds. In the course of examining those documents, the Corporation Counsel discovered Fannie Mae and Freddie Mac’s failure to pay.
Further details will be outlined at the news conference.
For media inquiries only, please contact Bill Mullan, Media and Communications Officer, at (248) 858-1048.
The Michigan attorney general’s office subpoenaed three mortgage processors including Lender Processing Services as part of a state probe of robo-signing.
Michigan Attorney General Bill Schuette said his office serviced Lender Processing, Fidelity National Financial Inc. (FNF) and CT Corporation System with investigative subpoenas as affiliates of DocX, a mortgage service support provider. The attorney general said he is seeking information about documents signed by DocX employees as “Linda Green.”
The subpoenas are part of a criminal investigation into questionable mortgage documentation filed with Michigan’s Register of Deeds offices, Schuette’s said in a statement today. The subpoenas were approved by the state court in Lansing June 13 and require responses by June 30, Schuette said.
Schuette Issues Subpoenas in Criminal Probe of Mortgage Processors
Contact: John Sellek or Joy Yearout 517-373-8060
Agency: Attorney General
LANSING– Michigan Attorney General Bill Schuette today announced that he has issued criminal investigative subpoenas against national mortgage servicing support providers in an expansion of his office’s investigation into questionable mortgage documentation filed with Michigan’s Register of Deeds offices during the current foreclosure crisis.
“Allegations of forged mortgage documents are very serious and require a thorough investigation,” said Schuette. “I will continue to work closely with federal and local authorities to find answers on behalf of Michigan homeowners.”
The Attorney General is empowered to pursue criminal investigative subpoenas under the Code of Criminal Procedure (MCL 767A.2(2)). Schuette’s office has filed criminal investigative subpoenas against DocX, which provides mortgage support services, including creating, processing or recording mortgage assignments or other mortgage documentation. In addition to DocX, the following companies affiliated with DocX were served with investigative subpoenas by Schuette’s office:
· Lender Processing Services, Inc.;
· Fidelity National Financial, Inc.; and
· CT Corporation System.
Schuette’s office has requested documents regarding the mortgage processing companies’ operations in relation to foreclosure and/or bankruptcy-related document processing. The subpoenas were approved by the 54B District Court in Ingham County on Monday, June 13, 2011, and the information must be provided to the Attorney General’s Office on or before June 30, 2011.
In April 2011, Schuette launched an investigation after county officials across the state reported that they suspected Assignment of Mortgage documents filed in their offices may have been forged. A recent “60 Minutes” news broadcast had shown that the name “Linda Green” was signed to thousands of mortgage-related documents nationwide, but with many different variations in handwriting. County officials in Michigan reviewed their files and found similar documents, thus raising questions about the authenticity of the documents filed.
Schuette is investigating whether certain mortgage processing companies permitted such robosigning of legal documents filed in connection with Michigan foreclosures. Apart from the question of whether falsified signatures were used, robosigning may also involve individuals signing affidavits to signify that mortgage documentation was properly prepared without ever conducting a proper review of the documents. Although Michigan is a non-judicial foreclosure state, Schuette is reviewing whether robosigned documents may have been filed with courts in limited cases.
Schuette urges any current or former employees of mortgage servicers or processing companies with knowledge of unlawful practices related to mortgage servicing or the execution of documents in Michigan to call the Attorney General’s Corporate Oversight Division at (517) 373-1160 (517) 373-1160 .
Schuette is also continuing to work with fellow attorneys general in a national workgroup examining mortgage lending practices, including the robosigning issue and consumer protection concerns affecting homeowners nationwide.
Schuette reminds Michigan homeowners that citizens do not need to pay to speak with their lender or servicer or to obtain outside assistance with foreclosure issues. Free local assistance with foreclosure issues can be found by calling the Michigan State Housing Development Authority at (866) 946-7432 (866) 946-7432.
The Ingham County Board of Commissioners in Michigan approved up to $60,000 in Legal Aid funding to represent borrowers affected by allegedly improper foreclosures and possible documentation fraud.
The county’s Register of Deeds Curtis Hertel Jr. uncovered potential fraudulent documents in his office calling into question hundreds of foreclosures. Hertel told HousingWire Wednesday he found 400 cases with possible fraudulent documentation involving Mortgage Electronic Registration Systems and another 100 involving DocX, a division of Lender Processing Services (LPS: 24.44 -1.89%).
At the hearing, after watching the 60 Minutes segment on DocX forged documents, they seem to appear in shock… “This is Compelling,” Rep. Knollenberg said.
Michigan Messenger-
LANSING — The growing controversy over allegedly fraudulent foreclosure documents will receive a hearing Wednesday in the state House Banking Committee. The controversy has also prompted some public officials to call for repeal of Michigan’s foreclosure by advertisement process, and instead adopt a judicial foreclosure act.
Ingham County Registrar of Deeds Curtis Hertel Jr. said last week that he had found at least 60 instances of such fraudulent documents in his office – documents presented by mortgage lenders as part of the foreclosure process.
He is not alone. Eaton and Clinton counties also reported questionable documents, and Oakland County Registrar of Deeds Bill Bullard wrote to Schuette about the problem earlier this week.
LANSING
Michigan Attorney General Bill Schuette announced today that he is working with Oakland County Register of Deeds Bill Bullard, and other local and federal authorities, to look into questionable mortgage documentation filed with Michigan’s Register of Deeds offices during the current foreclosure crisis.
Bullard and other county officials have uncovered Assignment of Mortgage documents filed in their offices with signatures of some mortgage executives that appear to have been forged by many different people, raising questions about the authenticity of the documents. For example, a recent “60 Minutes” news broadcast showed that the name “Linda Green” was signed to thousands of documents nationwide but with many different variations in handwriting. Bullard, in a letter to Schuette today, said that his office has found many examples of these documents in its files, as have other county Register of Deeds offices, and plans to forward the questionable documents to the Attorney General’s office for review.
Schuette’s office is beginning the process of working with local, state and federal authorities to look into the problem. Since late last year, the Michigan Attorney General’s office has also been a part of a 50-state Attorneys General workgroup addressing the robo-signing issue and other consumer protection issues.
“The idea that anyone would forge documents during a process in which a family is losing their home is absolutely unconscionable,” said Schuette. “We are working closely with federal and local authorities to get to the bottom of this.”
“I want Oakland County residents going through the foreclosure process to be aware of this potential problem with their mortgage documentation and strongly encourage them to review their files,” said Bullard. “My office will continue its investigation and work with Attorney General Schuette’s office as we find more questionable documents.”
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