The county commissioners voted to join a potential class-action lawsuit against Fannie Mae and Freddie Mac.
Mark Silvey, an attorney from Greg Coleman’s law firm, spoke to the commission Monday night about a case Knoxville-based Greg Coleman Law will potentially file against Fannie Mae and Freddie Mac in regards to the transfer tax.
In 2009, Fannie Mae and Freddie Mac held about 50 percent of the mortgages in the United States. The federal loan issuers are exempt from direct taxes, but not from excise taxes, such as the transfer tax, Silvey said. The transfer tax is 37 cents for every $100 of value.
Fannie Mae and Freddie Mac haven’t been paying the transfer tax, Silvey said.
“We feel like on behalf of the counties, this is money they ought to be paying,” he said.
That is why Greg Coleman Law is seeking to have the different counties in Tennessee, and potentially the state, join in a class-action lawsuit against the two companies. The suit seeks to recoup as much money as the courts and statute of limitations will allow, Silvey said.
Director of the Campbell County Finance Department Jeff Marlow pointed out that the “lion’s share” of money won from a successful lawsuit would go to the state, and asked why the state attorney general’s office isn’t pursuing it.
Silvey verified the state is entitled to the majority of the transfer tax, and would receive the majority of the money from the lawsuit. But the state has yet to take action, he said.
Commissioner Tom Hatmaker reasoned that even if the state gets a larger portion, the county gets money from the state.
Commissioner Bob Walden made a motion to join the class action suit, and Hatmaker seconded it. It passed 12-0.