Archive for Wednesday, January 29, 2014

Bankers, realtors seek repeal of mortgage registration fee; counties oppose

January 29, 2014

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— Numerous bankers lined up Wednesday calling for repeal of the state's mortgage registration fee, saying it was unfair to them and home buyers.

"It's a gotcha tax on an unsuspecting consumer," said Kurt Knutson, founder, chief executive officer and president of Freedom Bank in Overland Park.

Terry Wright, president of GNB Mortgage Co., said the fee is especially harmful to low- and moderate-income families who are low on cash when trying to secure a home loan.

And the bankers told the Senate Assessment and Taxation Committee that they are at a competitive disadvantage with certain government-sponsored lenders, such as the Federal Credit System, that don't charge the fee.

The fee is equal to $2.60 for each $1,000 borrowed on a home mortgage, or $390 for a $150,000 mortgage, although it isn't collected from people who pay cash for real estate.

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But county officials across the state, including Douglas County, said revenue lost from repealing the fee would have to be made up somehow.

In Douglas County, the fee generated about $1.8 million last year, and officials estimate a 2-mill rise in property taxes would be needed to replace that money.

Douglas County Clerk Jamie Shew said repealing the fee could lead to increased property taxes on people who are on fixed incomes and own their homes.

Bankers also claimed that few states charge this fee.

But Shew said states that don't have a mortgage fee make up for it with other charges.

The hearing on Senate Bill 298, which would repeal the fee, was scheduled to continue Thursday.

Comments

Luke Bell 1 year, 4 months ago

Again, this article deliberately fails to inform Douglas County residents that property taxes in Douglas County have already increased by 202% from 1997 to 2013. Even when the mortgage tax was in place, the county increased property taxes on those same "people who have fixed incomes and own their homes" by 12.6% each year.

Each year, Douglas County increases property taxes by an average of $1.8 million per year. There is no justification for increasing property taxes each year at more than four times the rate of inflation plus population growth. The counties just want to continue to increase property taxes AND continue to pocket millions of dollars per year in unrestricted mortgage tax revenue.

Clark Coan 1 year, 4 months ago

I agree Luke. It's a hidden tax by not cutting the mill levy when property values increase. USD 497 is the biggest spender with about 50% of total property taxes collected. The City is only about 23%.

In some places mortgage fees and real estate transfer fees are used for land conservation. I wish we'd do that here.

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