FAIRMONT - Martin County and Faribault County joined other counties today in a class action lawsuit against Fannie Mae and Freddie Mac.
The lawsuit seeks to recover deed tax transfers not paid on foreclosed properties resold by the companies, which are government-sponsored enterprises currently in conservatorship run by the Federal Housing Finance Agency.
Freddie and Fannie claim they are exempt from paying the tax, which every private seller is required to pay in order to transfer title to real property.
Martin County Attorney Terry Viesselman said the Hennepin County Attorney's Office (Minneapolis) is handling the case for all the counties.
"Action was filed on behalf of all the counties," Viesselman said. "Counties can choose to opt out."
According to the Hennepin County Attorney's Office, the two quasi-public entities have acquired ownership of thousands of properties through foreclosure in Minnesota. If they resold 20,000 homes, deed transfer taxes at the median home price of $150,900 would amount to about $10 million.
If the counties are unsuccessful in their claim, there is no cost to Martin County. If they are successful, the county must pay a proportional cost for expenses not exceeding 10 percent of recovery.
"We really have no risk," Viesselman said.
In other business at the Martin County Commission meeting Tuesday:
o Recycling rates for residential service and rural drop sites were raised 41 cents and 8 cents per month, respectively.
Solid waste manager Billeye Rabbe said the increase will continue for the next six years, in accordance with a contract with the new recycling provider.
o Commissioners opted not to renew a feedlot inspection service agreement with an independent contractor because of budgeting concerns. The county is going to try to complete all the inspections in-house.
"If they can't get it done we can look into hiring an independent contractor again," said Commissioner Jack Potter.