Two counties in Michigan have filed unprecedented lawsuits against two of the nation's largest subprime mortgage lenders, Fanny Mae and Freddie Mac. Oakland (which is north of Detroit and includes the cities of Troy and Southfield) and Ingham (located in central Michigan and includes Lansing) are accusing Fanny and Freddie of fraud, alleging the two mortgage companies made false statements in order to get out of millions of dollars in local and state taxes.
In Michigan, counties have a tax rate of $1.10 for every $1,000 of value being transferred. If a home sells for $100,000, there would be a $1,100 tax that would go to the county. The State has a similar tax, but much higher -- $7.50 for every $1,000 being transferred. Oakland and Ingham allege the two companies fraudulently avoided paying these taxes over the past six years, costing millions of dollars to counties and the State.
Officials in Ingham say they are simply trying to get to the bottom of things. Oakland officials, however, are taking a more direct stance. Oakland's Treasurer, Andy Meisner, is alleging the companies engaged in fraudulent conspiracy. According to the suit, the two companies did not pay the Transfer Tax because they have claimed in transfer documents that the transaction is exempt from the tax pursuant to Michigan or Federal statute. However, Meisner alleges that Fanny and Freddie did not qualify for those statutory exemptions, which, if true, means they owe the state and these counties several million dollars.
The suits were just recently filed and there has not yet been a response from either Fanny Mae or Freddie Mac. While these companies are only two among many companies involved in the subprime mortgage meltdown, it is encouraging to see that action is being taken against them. If you are facing a foreclosure where you are being sued by either Fannie or Freddie, contact a Jacksonville Foreclosure Lawyer or a Florida Foreclosure Lawyer today.
