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NEW YORK (Profitable.com) Congressman Phil Gingrey has introduced The Homebuyer Enhanced Fee Disclosure Act of 2010 (HR 6332) – a bill to facilitate and standardize disclosure of private transfer fees.
Private transfer fees lower a home’s initial purchase price by spreading infrastructure and development costs among future homebuyers, rather than forcing the initial buyer to absorb 100 percent of development costs.
Nationwide, an estimated 12 million homes have a private transfer fee. In the wake of our recent housing crisis developers have looked at selling off the future income (essentially creating a “development bond”) with the financing used to pay for infrastructure, restarting stalled projects, and paying down development loans.
Bryan J. Cohen, Esq., General Counsel and Executive Vice President of Freehold Capital Partners, said, “Disclosure is the key to making private transfer fees work for all stakeholders – home buyers, developers, banks, non-profit organizations and communities. The proposed legislation provides important consumer protections by ensuring uniform transparency and disclosure of private transfer fees in all relevant real estate transactions, while preserving a valuable mechanism for spreading infrastructure costs, reducing negative equity, and making home ownership more affordable.”
In addition to ensuring that consumers are armed with the facts necessary to make an informed purchase decision, HR 6332 resolves the concerns raised by the National Association of Realtors, the title industry, the Federal Housing Finance Authority (FHFA) and state legislatures.