The Coalition to Stop Wall Street Home Resale Fees is demanding Freehold Capital Partners to release a list of properties that are paying predatory fees that they are unaware of.
Wall Street Home Resale Fees are incorporated into home covenants that filter money from homeowners to private third parties that have no ongoing relationship with the property.
Freehold Capital Partners said there is $600 billion in real estate nationwide that is subject to the fees.
The fee requires a percentage of the final sales of a home, often 1%, be paid to private third parties every time the property is sold.
This fee usually lasts for 99 years.
“These fees are nothing more than a predatory technique that tries to turn a consumer's property into an ATM for the developer," said Barry Zigas, director of housing policy at the Consumer Federation of America.
Freehold Capital Partners, a New York-based company which creates predatory private transfer fees, has not released any information where the real estate properties are located or who benefits from the generated fees.
The company’s policy is to announce business contracts on a state-by-state basis, but not to release the business partners or developments that have to pay the private transfer fees.
Kurt Pfotenhauer, CEO of the American Land Title Association and a member of the Coalition to Stop Wall Street Home Resale Fees, said homeowners who have to pay for the predatory fees are burdened in trying to sell their property.
“Freehold Capital has not been transparent about where these covenants exist,” Pfotenhauer said.
“Unfortunately, homeowners across the country continue to unknowingly be subjected to these fees. Until the fees are completely banned, consumers deserve full transparency regarding the location of the fees.”
Currently, 19 states have restricted the fees, which challenge the principle in real estate law that any covenant that burdens the land must also benefit the land.
“Selling a home in a down economy is tough enough without a hidden fee attached to the contract,” said Ron Phipps, president of the National Association of Realtors. “These fees complicate the safe, efficient and legal transfer of real estate and cause homeowners to lose money.”
The Federal Housing Finance Agency has banned Fannie Mae, Freddie Mac and the Federal Home Loans Banks from investing in mortgages burdened by the fees.
The agency will be making a final ruling in the near future regarding the private transfer fees.
