Last week, two more federal district courts dismissed suits seeking to collect transfer real estate taxes from Fannie Mae, Freddie Mac, and their conservator, the Federal Housing Finance Agency.
Counties in New Jersey and Maryland had brought class action suits, arguing the government-backed mortgage guarantors failed to pay state and local real estate transfer taxes on foreclosures.
Fannie and Freddie have taken ownership of countless foreclosures, which local governments have been eyeing as a potential treasure trove of tax revenue ever since March 2012, when the U.S. District Court for the Eastern District of Michigan ruled the agencies were not statutorily exempt from real estate transfer taxes.
Michigan, however, still stands alone in this interpretation. Judge Deborah Chasanow in the U.S. District Court for the District of Maryland, and Judge Robert B. Kugler in the U.S. District Court for the District of New Jersey, are the most recent to follow the other federal district courts that have decided in favor of Fannie and Freddie.
The suit filed in New Jersey was the first nationwide class action, but more are pending in state and federal courts around the nation. Stay tuned for updates on new decisions and the inevitable wave of appeals to follow.