WASHINGTON - How about this for a new and ingenious real estate money
machine: Every time a house sells during the next 99 years, 1 percent of the
price goes back to the original developer or is shared among investor
partners. Ka-ching!!!

The levy won't be subject to haggling between future buyers and sellers,
either. That's because it's a covenanted mandate - a novel type of lien on
the underlying real estate - called a private transfer fee. It's not a
government transfer tax. Nor is it a homeowner association or environmental
protection covenant. It's purely a private requirement that runs with the
land. If a seller refuses to pay it to a third-party trustee at closing, the
sale won't proceed.

Sounds like a great deal - provided you're on the collecting end of a
near-perpetual revenue stream. Apparently the idea has been attractive
enough so that substantial numbers of developers and builders are signing up
with a New York-based company that has devised what it calls a
"patent-pending" system to tap into real estate transactions well into the
next century.

Manhattan-based Freehold Capital Partners declines to identify any clients
or participants in its private transfer fee program, but claims on its Web
site that as of late 2009, "the owners of an estimated $488 billion in real
estate projects nationwide, including some of the country's largest, most
well-respected companies, have partnered with Freehold."

The company says it is negotiating with institutional investors to
"securitize" pools of transfer fees - essentially creating bonds based on
future cash flows that can be sold to deep-pocket money managers.

By creating future revenue streams - which builders can "monetize" upfront
by selling to investors for cash - the plan allows developers to sell houses
for lower prices than they otherwise could.

http://www.dailyherald.com/story/?id=363252



Best Regards

Tom.

On Fri, 5 Mar 2010 16:19:07 -0800, "azotic"
wrote:

WASHINGTON - How about this for a new and ingenious real estate money
machine: Every time a house sells during the next 99 years, 1 percent of the
price goes back to the original developer or is shared among investor
partners. Ka-ching!!!
snip
http://www.dailyherald.com/story/?id=363252

Best Regards

Tom.
===========
Thanks for the heads up.

It is worth noting that this story appears to have been "broken"
by an obscure suburban Illinois paper rather than one of the
majors or a wire service. Was this another example of a "spike"
at the request of a major advertiser? Where was the WSJ,
Bloomberg and CNBC?

==Everyone that pays federal taxes has a dog in this fight. The
tax deductibility for mortgage interest is a huge subsidy and tax
transfer, and another bogus security is simply pouring gasoline
on the financial/economic fire currently raging, which the
taxpayers are spending trillions to first contain and then
extinguish.==

My brother is in [NW Arkansas] real estate and was unaware of
this scam. As a resident of Kansas I was pleased to see that
Kansas was one of 4 states that have already banned this grift.

I am writing a letter to my Representative and Senators asking
that the various federal agencies involved with home loans be
prohibited from participating in or purchasing loans for property
which include a "private" transfer fee covenant, which should put
a stop to this without any expense or dictates to state
governments, banks, mortgage companies, or indeed anyone. E.g.
"private" transfer fee = *NO* FHA loan, etc..

As this scam seems to have already been worked in some areas, it
will be necessary for Congress to enact legislation abrogating
the covenanted conditions, as was done with the gold clause when
the US went off the [domestic] gold standard by _The Gold Reserve
Act of 1934_. An alternative would be to allow the purchaser to
reascend the mortgage contract based on failure to fully
disclose.

An additional suggestion is that the SEC and/or CFTC be directed
to prevent the creation and interstate sale of the bogus
"securities" collateralized by these "private" transfer fees.

It will also be suggested that the names of their associated
builders and developers be subpoenaed from Freehold by Congress,
and turned over to the IRS and DoJ for very careful examination.

All loans involving a "private" transfer fee should also be
closely examined to verify full and complete disclosure in
accordance with existing regulations(_Mortgage Disclosure
Improvement act of 2008_ and TILA [Truth in Lending Act]) was
done.

I will post a copy of my email to the NG in case anyone wants to
use it as a template or even send it to their own congress
persons.

Freehold Capital Partners and their associated developers and
builders must have a "death wish" and/or utter contempt for the
American public.
http://www.freeholdcapitalpartners.com/

Is it really going to require mass vigilante lynching of these
scam artists to get the US economy back on track?


Unka George (George McDuffee)
...............................
The past is a foreign country;
they do things differently there.
L. P. Hartley (1895-1972), British author.
The Go-Between, Prologue (1953).

On Sat, 06 Mar 2010 01:42:28 -0600, F. George McDuffee
wrote:
snip
I will post a copy of my email to the NG in case anyone wants to
use it as a template or even send it to their own congress
persons.
snip
As promised here is the email I sent to my congresspersons. Feel
free to use all, some, or none of it.

You can identify your congresspeople and access their webmail at
http://house.gov/
http://senate.gov/
FWIW -- after you locate their webmail page, bookmark it for easy
future access. [An opinion is a terrible thing to waste...]

============
AT THE END OF THE DAY, WILL THE AMERICAN PEOPLE HAVE TO RESORT TO
MASS LYNCHINGS TO GET THE U.S. ECONOMY AND FINANCES "BACK ON
TRACK?"

Ref: http://www.dailyherald.com/story/?id=363252

Private' transfer fee on home sales can be long-term money
machine
By Ken Harney | Columnist
Published: 3/5/2010 12:00 AM

WASHINGTON - How about this for a new and ingenious real estate
money machine: Every time a house sells during the next 99 years,
1 percent of the price goes back to the original developer or is
shared among investor partners. Ka-ching!!!
snip
Manhattan-based Freehold Capital Partners declines to identify
any clients or participants in its private transfer fee program,
but claims on its Web site that as of late 2009, "the owners of
an estimated $488 billion in real estate projects nationwide,
including some of the country's largest, most well-respected
companies, have partnered with Freehold."

The company says it is negotiating with institutional investors
to "securitize" pools of transfer fees - essentially creating
bonds based on future cash flows that can be sold to deep-pocket
money managers.
snip
-----

There are many disturbing things about this article, but one of
the most unsettling is that this very important episode was not
broken by one of the major financial media such as the Wall
Street Journal, Bloomberg, CNBC, Forbes, etc. or one of the
financial pundits, but rather by a good journeyman reporter on a
small suburban Chicago paper. It also does not appear that any
of the regulatory agencies such as the SEC, CFTC and the myriad
of governmental agencies involved with real estate finance were
even aware of this latest financial flim-flam.

EVERY PERSON THAT PAYS FEDERAL TAXES HAS "A DOG IN *THIS* FIGHT."

* First, the mortgage interest tax deduction is one of the
largest subsidy [tax transfer] programs benefiting both the
homeowners and more importantly, the lenders.

* Second, and possibly more important, are the trillions of
taxpayer dollars that have been spent, with trillions more
committed, to first contain and then extinguishing the financial
conflagration that is consuming the American, indeed global,
economy.

What we have here is an effort on the one hand to hijack, by
trick or deceit, 1% of the residential sale price for 99 years.
This is bad enough, but new collateralized securities backed by
these revenues [CDOs] are to be created and sold. Operationally
we have robbery and embezzlement on the one hand and arson on the
other, as these new "securities" will simply pour more gasoline
on the currently raging economic fire.

It is critical that "program" be stopped as quickly as possible,
before it has time to embed itself and create a political
constituency.

In order to avoid imposing yet more regulations and more
regulators on the parties involved it is suggested that Congress
immediately enact legislation that property with "private
transfer fee" covenants (or other similar arrangements) are not
eligible for government insured financing, mortgages on property
with "private transfer fee" covenants cannot be purchased by any
federal agencies, nor is the mortgage interest paid on properties
with "private transfer fee" covenants tax deductible. This
should stop this practice dead in its tracks.

This leaves a possibly considerable problem of existing "private
transfer fee" covenants. It is suggested that Congress enact
legislation simply abrogating these and similar covenants. Two
precedents exist for such abrogation. First, the "gold clause"
was abrogated by the _The Gold Reserve Act of 1934_ when the U.S.
went off the domestic gold standard. Second, racially
restrictive covenants were abrogated under several civil rights
statutes and court cases.

One of the more pressing macro economic perils is the creation
and sale of another new Collateralized Debt Obligations [CDOs],
this time "backed" by the "private transfer fee" revenue stream.
Because of the _CFTC Modernization Act of 2000_ these derivatives
are currently exempt from government oversight. These
"securities" are a fraud on the public and their creation and
sale must be prevented. Legislation must be enacted prohibiting
the creation and sale of these CDOs, and requiring the
"unwinding" of any existing "securities" to the extent possible,
with the original purchase price being refunded to the current
owner.

Congress should also subpoena Freehold Capital Partners
http://www.freeholdcapitalpartners.com/ for the names and
addresses of their "partnering" builders and developers. These
names should then be forwarded to the IRS and DoJ for very close
inspection of their lending and sales practices and income
declarations [for possible tax evasion]. Compliance with TILA
[Truth in Lending Act] and other disclosure statutes, e.g. HMDA,
should also be verified, with the homeowners offered the
opportunity to rescind their mortgage and other contracts if
disclosure was not "full, fair and complete," and can be
documented.
============


Unka George (George McDuffee)
...............................
The past is a foreign country;
they do things differently there.
L. P. Hartley (1895-1972), British author.
The Go-Between, Prologue (1953).

I guess I don't understand the problem - if there are conditions that you do
not wish to accept, then don't accept them - buy elsewhere, or rent. there
are cities/developments where the land is held "fee simple" (if I remember
the phrase correctly) which means it is on a 99 year lease or some
equivalent, starting when it was first sold - I just plain refused to look
at those properties, and therefore live elsewhere. If this was mandated
nationally, then it could be an issue, but if it relates to single
developments, then it's not an issue.

"

On Sat, 6 Mar 2010 15:02:18 -0800, "Bill Noble"
wrote:

I guess I don't understand the problem - if there are conditions that you do
not wish to accept, then don't accept them - buy elsewhere, or rent. there
are cities/developments where the land is held "fee simple" (if I remember
the phrase correctly) which means it is on a 99 year lease or some
equivalent, starting when it was first sold - I just plain refused to look
at those properties, and therefore live elsewhere. If this was mandated
nationally, then it could be an issue, but if it relates to single
developments, then it's not an issue.
============
As a buyer you have to be aware of the conditions and what these
conditions imply. This is where many of the sub prime/NINJA
mortgages went off the rails as the borrowers did not understand
the ramifications of what they were signing. In [too] many cases
it appears the contracts and "disclosure" forms were designed to
be as confusing as possible. Indeed, large numbers of these
contracts are being adjudicated between some very savvy lawyers
to determine exactly "what is is."

If this only effected the borrowers and their lenders, in a
Darwinian/Spencerian sense you could say they made their bed, now
they can lie in it.

The insidious danger and unfortunate reality is that *ALL* US tax
payers, current and future, are on the hook for the sub prime
fiasco, and now this scam, in that our tax money is being used,
first to subsidize these mortgages through the mortgage interest
tax deduction, and then to bail out the mortgage
companies/agencies, e.g. Freddie and Fannie, after the
responsible individuals have "taken the money and run."

If you own a home in a neighborhood with a significant number of
foreclosures or "walkaways," the value of your house has take a
big hit from this also.

The second point of danger to the community is the creation and
sale of yet another class of "vapor ware" CDO derivatives, this
time based on the expected revenue streams from the "private
transfer fees."

Remember that because of the initial high yields and likely AAA
ratings, you (or your neighbors') pension fund [think CALPERS]
and life insurance company will be loading up on this crap, just
as they did on the subprime/NINJA ARM backed CDOs.

Even if you individually never touch any of this "stuff," as a
taxpayer youwill still be on the hook, through the federal
governmental backing of the pension funds via the PBGC, and the
state insurance guarantee funds. Even if the PBGC and insurance
guarantee funds do not have to tap their treasury credit lines,
because of the additional levies on the solvent plans and
companies, the benefits will be reduced and the premiums
increased.


Unka George (George McDuffee)
...............................
The past is a foreign country;
they do things differently there.
L. P. Hartley (1895-1972), British author.
The Go-Between, Prologue (1953).

"Bill Noble" wrote in message
...
I guess I don't understand the problem - if there are conditions that you
do not wish to accept, then don't accept them - buy elsewhere, or rent.
there are cities/developments where the land is held "fee simple" (if I
remember the phrase correctly) which means it is on a 99 year lease or some
equivalent, starting when it was first sold - I just plain refused to look
at those properties, and therefore live elsewhere. If this was mandated
nationally, then it could be an issue, but if it relates to single
developments, then it's not an issue.

"

The problem is it will become a mandate when they have enough $$$$ to buy
legistlative action just like the HOA industry did. Given enough time it
will be
impossible to find any property that is unencombered if they get thier way.

Thier goal is to eventually place covennants on all property.

As George pointed out there is lots of room for fraud.

Best Regards
Tom.