Montgomery County sues Fannie Mae for back taxes

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Local,Maryland,Kate Jacobson,Taxes,Montgomery County

Montgomery County officials are suing Fannie Mae and Freddie Mac for unpaid Maryland transfer taxes.

The county is suing for at least $75,000 in property transfer taxes from the mortgage companies.

Corporations and residents who buy or sell real estate in the county are subject to a 1 percent transfer tax. According to county law, though, government agencies are exempt from this rule if a property is being transferred to them, for example when a house enters foreclosure. Fannie Mae and Freddie Mac are considered government agencies, though county officials claim they should be classified as private, for-profit companies; therefore they shouldn't be exempt from the payment.

"Defendants Fannie Mae and Freddie Mac have not paid the Maryland transfer taxes because they have claimed erroneously ... that the transaction is exempt from the Maryland Transfer Taxes on several grounds, none of which apply to the transactions at issue," the suit claims.

The suit says that as of March, 31, 2003, the mortgage giants were private, publicly traded corporations, and are not currently agencies of the federal government.

The Montgomery County Council voted in December to pursue the suit following a similar legal battle in Michigan.

In March a U.S. district judge ruled in Michigan that Oakland County was entitled to millions in unpaid transfer taxes on foreclosed properties between 2006 and 2011.

kjacobson@washingtonexaminer.com

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Kate Jacobson

Montgomery County reporter
The Washington Examiner