Friday, August 24, 2012
Hennepin County Attorney Mike Freeman and Hennepin County Board Chair Mike Opat discuss the lawsuit.
Hennepin County Attorney Mike Freeman and County Board Chairman Mike Opat announced in a news conference Friday the filing of a civil lawsuit against Fannie Mae and Freddie Mac for not paying the Minnesota Deed Transfer tax.
The suit, filed in U.S. District Court in Minneapolis as a class action on behalf of Hennepin County and the other 86 counties, is seeking more than $10 million.
“All of us, when we sell our homes, have to pay the deed tax,” Freeman said at the news conference. “Fannie and Freddie were not much in the business of buying and selling houses. But when the housing crisis hit, they got into selling big time.”
Opat told reporters that the county board was unanimous in approving the lawsuit.
“Whoever files the mortgage has to pay the tax, whether it is your neighbor or Freddie and Fanny,” Opat said. “It’s timely because we use some of the tax for cleaning up polluted lands and the Legislature sunset that law Aug. 1. If we are successful, we can use that money to continue to clean up polluted properties.”
Both Opat and Freeman said taxpayers should be pleased that a public law office is leading the way on the case, rather than hiring an outside firm that would take 25 percent of any award.
In a prepared statement, Freeman explained why his office took on this case, "This is a continuation of our work to bring some measure of justice to the citizens of Hennepin County and Minnesota who were innocently harmed by the reckless behavior of corporations during the housing boom.”
The crucial legal issue is whether state law and the federal charters for Fannie Mae and Freddie Mac provides an exemption so they don’t have to pay the deed transfer tax. The lawsuit and a news release go into greater detail about why the county believes there is no exemption.
Freeman said a few federal courts have ruled in favor of Fannie Mae and Freddie Mac. However, earlier this year, a Michigan federal court came down on the side of Hennepin County’s position.
“I’m sure it will end up in the Supreme Court,” Freeman said. “But there’s nothing like one win in the column.”