Land Title Association Calls Private Transfer Fees a Scheme

The American Land Title Association (ALTA) announced it supports a proposed rule issued by the Federal Housing Finance Agency that would limit Fannie Mae, Freddie Mac and the Federal Home Loan Bank from investing in mortgages encumbered by private transfer fee covenants (PTFs).  The association says PTFs are a new controversial financial scheme that involve adding language to home purchase contracts  requiring that a percentage of the sales price be paid to the original corporate owner of a property every time the property is sold, typically for 99 years. ALTA says the right to collect these private transfer fees would then be securitized and sold to enrich investors at the cost of stealing equity from consumers, forcing homeowners to pay a large fee to sell their homes and adding a complicated legal roadblock to the home sale process.
FHFA’s proposed rule, which would apply to  PTFs created on or after publication of the proposal, excludes fees paid to homeowner associations, condominiums, cooperatives, and certain tax-exempt  organizations that use private transfer fee proceeds to benefit the property.
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