With the signing and passage of HB 2288 on Tuesday, Gov. Linda Lingle of Hawaii joined state legislatures and governors in 12 states across the country who have taken swift action to protect American homeowners by placing bans on Wall Street Home Resale Fees. These fees (also known as “private transfer fee covenants”) are the result of a dangerous new financial scheme that steals home equity, lowers home resale values and adds another layer of difficulty to selling a home.
Said Kurt Pfotenhauer, CEO of the American Land Title Association, “Today Governor Lingle stood up for Hawaii homeowners, by outlawing Wall Street Home Resale Fees. The American Land Title Association and the Coalition to Stop Wall Street Home Resale Fees are proud of the Governor and the State Legislature, and urge other states to follow Hawaii’s example.”
Wall Street Home Resale Fees is a controversial new financial scheme that is facing opposition across the country. Developers, in consultation with Wall Street advisers, are attempting to add language to home purchase contracts requiring that a percentage of the sales price be paid to the original corporate owner of a property every time the property is sold, typically for 99 years. The right to collect these Wall Street Home Resale Fees would then be securitized and sold to enrich investors at the cost of stealing equity from consumers, forcing homeowners to pay a large fee to sell their homes and adding a complicated legal roadblock to the home sale process.
Dow Jones Newswire recently reported on the growing resistance to Wall Street Home Resale Fees. In an article titled “New York Firm’s Property Transfer Fee Plan Stirs Controversy”, Jessica Holzer reports, “Rep. Brad Sherman (D., Calif.) called it a “new predatory financial scheme” at a congressional hearing last month. Federal Housing Finance Agency Acting Director Ed DeMarco hinted at the hearing that his agency might bar Fannie Mae (FNM) and Freddie Mac (FRE) from buying mortgages on homes with transfer fees attached.” She continued, “ A Federal Housing Administration official separately assured the title insurer group earlier this year that the government won’t insure mortgages backed by homes with the transfer fee covenant. DeMarco said he was “very troubled” by what he was learning about transfer fees: “I would expect that the enterprises and FHFA would have something to say about this is in the near future.”
State governments across the country have also recognized the danger of Wall Street Home Resale Fees and have begun to take action. With the passage of HB 2288, Hawaii becomes the 14th state to have restricted the use of Wall Street Home Resale Fees.
The American Land Title Association has organized the Coalition to Stop Wall Street Home Resale Fees in order to fight this dangerous financial scheme and protect homeowners across the country. The Coalition to Stop Wall Street Home Resale Fees is proud to stand with Governor Strickland and the Ohio Legislature, and their efforts to protect homeowners across the state.
Submitted by Andrew Lewis of Coalition to Stop Wall Street Home Resale Fees