Minneapolis, Minn. (May 20, 2010) – Minnesota Governor Tim Pawlenty took swift action Wednesday to protect Minnesota homeowners by signing the Transfer Fee Covenant Act. The new law places a ban on private transfer fee covenants (also known as “Wall Street Resale Fees”), a dangerous new financial scheme that steals home equity, lowers home resale values and adds another layer of difficulty to selling a home.
The Minnesota Land Title Association had urged Governor Pawlenty to sign the legislation, and is thrilled that the Governor has taken action. Said David Welshons, President of the Minnesota Land Title Association, “Today the Governor stood up for Minnesota homeowners, and showed greedy Wall Street investors that their dangerous financial schemes won’t be permitted in our state.”
Across the country, developers, in consultation with Wall Street advisers, are attempting to add 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. The right to collect these “Wall Street Resale 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.
Minnesota becomes the 11th state to have restricted the use of Wall Street Resale Fees. The Minnesota Land Title Association is proud to stand with Governor Pawlenty, and thanks him for taking action to protect homeowners across the state.