Today, the Coalition to Stop Wall Street Home Resale Fees sent a strong letter to Treasury Secretary Timothy Geithner, as well as the heads of 11 other government departments and agencies; advising the administation to outlaw home resale fees. You can read the letter in full below:
July 29, 2010
The Honorable Timothy Geithner
U.S. Department of Treasury
1500 Pennsylvania Avenue, NW
Washington, D.C. 20220
Dear Secretary Geithner:
Wall Street Home Resale Fees threaten homeowners across the United States. Often unnoticed by consumers, these fees are also called private transfer fee covenants, and are recorded by covenant or sales contract by private third parties. They require that every time a home is sold for the next 99 years, a percentage of the sales price of the home (usually 1%) must be paid to the third party. In return, homeowners’ equity is taken from them, the price of their home is depressed, and the smooth transfer of real property is threatened – possibly making their home unmarketable.
More troubling, one company is negotiating with possible investors to “securitize” projected revenue streams from pools of these fees.
State legislatures and federal regulators have recognized the danger of Wall Street Home Resale Fees to consumers and have begun to take action:
- The use of Wall Street Home Resale Fees has been restricted in 17 states: Arizona, California*, Florida, Hawaii, Illinois, Iowa, Kansas, Louisiana, Maryland, Minnesota, Mississippi, Missouri, North Carolina, Ohio, Oregon, Texas, and Utah.
- HUD confirmed that these fees violate HUD’s regulations, and that the FHA will not insure mortgages for properties with Wall Street Home Resale Fees.
At a Congressional hearing in May, Rep. Brad Sherman (D-CA) called Wall Street Home Resale Fees a “new predatory scheme.” Federal Housing Finance Agency Acting Director Ed DeMarco has said that he is “very troubled” by what he is learning about the fees, and that he expects “the enterprises and FHFA would have something to say about this [issue] in the near future.”
We are opposed to the use of Wall Street Home Resale Fees. We write today to urge the Obama Administration to protect consumers and ban Wall Street Home Resale Fees.
American Land Title Association
American Federation of State, County and Municipal Employees
Center for Responsible Lending
Georgia State Trade Association of Non-Profit Developers
Hawaii Advocates for Consumer Rights
Institute for Liberty
Interfaith Housing Center of the Northern Suburbs
Property Rights Alliance
National Association of REALTORS®
National Council of La Raza
Transport Workers Union
*California requires special disclosure when a home is placed under a Wall Street Home Resale Fee