Two competing federal bills were introduced to regulate private transfer fee covenants.  One protects homeowners, and one protects greedy Wall Street profiteers.  Both seek to amend the Real Estate Settlement Procedures Act to accomplish their goals. 

There are rumors floating around that the Obama Administration will order Fannie Mae and Freddie Mac to forgive a portion of homeowners' mortgage debt - at least those that are currently underwater.  If true, it could happen as soon as this month.  It is difficult to tell how well such a move will received.  On one hand, Wall Street got its bailout and many are wondering what good that did for the average homeowner.  On the other, the many people who did not borrow more than they could afford may not like seeing irresponsible borrowers getting let off the hook for their poor decisions. 

Undeterred by the several states that have banned the use of private transfer fees, Freehold is apparently still trying to find a way to securitize them.  The Wall Street Journal has reported that Freehold has approached several Wall Street banks to develop the securities, but has not yet struck a deal.

The end of May, federal unemployment benefits began to expire leaving 1.2 million jobless Americans cut off.  The House passed a bill providing a six-month extension, but the Senate has not been able to pass such legislation... despite three attempts.  All of the Senate Republicans have blocked the effort. 

This will certainly worsen our already troubled economy as well as pile on to our crippled housing market.  One economist has noted that we may be setting the stage for a Third Depression.  While our Congressman are busy playing politics, Americans are suffering... and it is going to get worse.

The Ohio Senate, after 6 hearings in the Senate Judiciary - Civil Justice Committee, voted on HB 292 in favor of a complete ban on private transfer fee covenants.  The bill was widely supported by several Ohio organizations, including the Ohio Bar Association, the Ohio Land Title Association, the Ohio Association of Independent Title Agents, the Ohio League of Bankers, and the Ohio Realtors Association.  The only opponents of the bill were Freehold Capital Partners, the organization promoting them nationally, and the Ohio Builders Association. 

Laws passed in Iowa in 2005 and 2009 require county recorders to participate in an online records system, but two counties are refusing to cooperate.  Two years ago, privacy advocates discovered the system contained hundreds of social security numbers - including Governor Chet Culver's.  Officials in Hamilton and Hardin counties are refusing to provide new records, citing privacy concerns.  The debate is heating up as the Attorney General's office reviews the situation.

Yesterday, Minnesota Governor Tim Pawlenty signed a bill that bans private transfer fees in the state.  This makes the 10th state to implement such a prohibition and more than a dozen other states are currently looking at the issue.  Minnesota's ban follows a similar ban in Maryland that went into effect earlier this month. 

An interesting post in the forums raised the issue of the unauthorized practice of law as it relates to title abstracting.  This is a very interesting topic with a long history that starts with the basic question - what is "abstracting?"  The function of an abstractor has changed over the years.  The line between abstracting and the practice of law has been blurred. 

For more than two years, I have been blogging about private transfer fee covenants and the group that is promoting them, Freehold Licensing.  Freehold has actually attempted to patent their business strategy of creating private transfer fee covenants (a separate act that I find offensive).  The group now has a new name and a new strategy, all evolving while several states and trade organizations are trying to put a stop to private transfer fee covenants.

I have written a few blog posts about the Freehold Licensing transfer fee covenant.  Since the last one was posted, I have received two emails from readers which included attached underwriting bulletins with the same directive - do not insure transactions that include the Freehold covenant.  There seems to be consensus among both title industry insiders and legislatures that these types of private transfer fee covenants are bad news.  However, we must not confuse these rather unique covenants with traditional transfer fee covenants that are beneficial to the property owner, such as those used to fund community associations.