Hertel sues banks, foreclosure firms over transfer taxes

Ingham County Register of Deeds Curtis Hertel, Jr. filed suit in Ingham County Circuit Court Wednesday against at least eight financial institutions and foreclosure firms alleging that they have fraudulently avoided paying millions of dollars in property transfer taxes.

“I believe that Ingham County’s damages are in the millions and the state’s damages are in the tens of millions,” Hertel said in an interview with Messenger Wednesday morning.

Among the defendants in the case are Freddie Mac, Fannie Mae, Bank of America and Wells Fargo. In addition, foreclosure giants Trott and Trott and Orlans are also named as defendants in the case.

Transfer taxes are paid when a new deed is recorded in the county’s Register of Deeds office. The taxes apply to the sale price of the property being transferred, unless it falls under $100. Many large-scale banks have used Fannie Mae and Freddie Mac to claim an exemption to the taxes by identifying themselves as government entities, which Hertel contests.

The official transfer tax rate for counties in Michigan is $1.10 for every $1,000 of value being transferred. So the sale of
a $100,000 home would typically carry a $1,100 tax. State taxes on the same transactions stretch even further – $7.50 for
every $1,000 of value being transferred.

“This is money that should have been applied to the county’s general funds, which could have been used for public safety,
health programs, or countless other public services,” said Hertel. “Additionally, the state taxes collected would have gone
straight to the school aid fund. It’s time for some of the banks responsible for the foreclosure mess to pay their fair share,
instead of allowing our county’s taxpayers to bear all of the burden.”

This move comes even as officials in the Attorney General’s office as well as the FBI are investigating allegedly fraudulent documents filed in Ingham County as part of the process of foreclosure in the state.