Proposal to Curb Private Transfer Fees
U.S. regulators are proposing a new rule to ban Fannie Mae and Freddie Mac from acquiring loans where home buyers are charged private transfer fees.
Private transfer fees, also known as “capital recovery” frees, are inserted by developers for newly-built housing subdivisions. They require sellers to pay a percentage of the selling price to the original developer of the property every time the property changes hands for up to 99 years. The percentage charged is usually 1 percent of the sales price.
Real estate groups have been speaking out against private transfer fees, calling it an unfair extra fee to home owners.
The Federal Housing Finance Agency has proposed a rule that Fannie, Freddie, and 12 Federal Home Loan Banks would no longer be able to acquire mortgages that have such fees.
Read the whole article from Dow Jones Business News.
Posted on Thu, February 3, 2011