from Rome News
Floyd County is going after Fannie Mae and Freddie Mac for real estate transfer taxes the federally backed mortgage companies contend they don’t have to pay.
The County Commission approved a representation agreement with law firm Pierce-Gabriel Partners LLC of Alpharetta following a closed meeting Thursday morning.
A suit seeking class action status could be filed shortly in federal court, according to County Attorney Tommy Manning, who is listed as one of the co-counsels in the action. The action could potentially involve all 159 counties in the state.
“This has been stirring for several years,” Superior Court Clerk Barbara Penson said. “When these cases were fought and won in Michigan and Nevada, it sort of woke everyone up across the country.”
At issue is the real estate transfer tax paid whenever property is sold. In Georgia, the rate is $1 for every $1,000 of the sales price.
Illinois, with essentially the same tax rate, and Florida, at $7 per $1,000, are among other states where claims are under way against the Federal Home Mortgage Co. (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae).
“Under the thinking that they are government lending agencies, they’ve been exempt from paying the transfer tax,” Penson said. “But they’re not federal. They’re privately owned mortgage companies like Chase and the others.”
Daniel Massey, Superior Court clerk for Chatham County in Savannah, took the lead in a similar class-action suit filed earlier this month. Penson said she’s also been approached by other firms.
The Pierce-Gabriel agreement is on a contingency basis: The firm will be paid out of any recovered funds. Penson said it’s too early to say how much money is involved.
“It will take mounds of research,” she said. “This dates back to at least 2003, and potentially longer than that. But at $1 per $1,000, the transfer tax on one $220,000 house would be $220.”
In addition to Manning and Andrew Garner in Rome, law firms in Chicago, Dallas and Enid, Okla., also are associated with Pierce-Gabriel as co-counsels in the action.