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Landmark Case? ...Hudson Valley Federal Credit Union VS. The State of New York

By
Real Estate Agent with Diamond Partners Inc 00244377

How fair is this?  Did you know that in New York, anyone obtaining a mortgage must pay a tax of 1.05% of the cost of the loan amount? Currently, a Dutchess County home-buyer who finances $300,000 is taxed $3,150, an amount which it typically added to the buyer's closing costs.

My source tell me that in other states throughout the United States, home buyers seeking mortgages through credit unions are not subjected to mortgage recording TAX.  True or False?  (Maybe some of the other Active Rain members will confirm). 

 And, how great would it be if home-buyers here in New York could avoid having to pay this tax too? 

Well, perhaps buying a home in New York is about to become a little more affordable if the Hudson Valley Federal Credit Union is successful in a lawsuit filed in state Supreme Court.  http://www.poughkeepsiejournal.com/article/20100326/NEWS05/3260328/Credit-union-files-suit-over-mortgage-tax

The lawsuit is based on claims by the credit union, that laws passed during the Depression, had previously established that not-for-profits are exempt from paying the mortgage recording tax. The State of New York is fighting back with claims that credit unions are not exempt from the mortgage tax because it does not involve tangible property, but rather it's a "privilege" to obtain a mortgage.

Since when is obtaining the The American Dream a privilege?  I think most people would admit to working very hard to afford whatever housing options are available to them and any kind of shelter is a necessity, whether a rental unit, a property owned free and clear or a home that is mortgaged.

Many real estate professionals in the Hudson Valley wiill be watching this case closely.  It's challenging enough for home-buyers these days to save for closing costs with the many ongoing and changing federal guidelines which have been imposed on the home lending business. It will finally be good news for a change to know that home-buyers might actually be able to "shave" money off their closing costs instead of being subjected to more and more out of pocket expenses associated with the purchase of a new home.

Posted by

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Carol Culkin - REECENICHOLS REAL ESTATE

Carol Culkin - Licensed Real Estate Salesperson for ReeceNichols Real Estate, is your source for real estate in Overland Park and the bordering cities of Leawood, Olathe, Mission, Miriam, Lenexa and Shawnee, Stillwell and Spring Hill. Carol has been ranked as an award winning agent and offers her clients over 10 years of real estate experience.

PROFESSIONAL AFFILIATIONS, DESIGNATIONS AND COMMUNITY INVOLVEMENT:

Member of National Associations of Realtors®, Member of Kansas Associations of Realtors®, Member of Kansas City Regional Associations of Realtors®, Member of Heartland Multiple Listing Services, Accredited Buyer's Representative (ABR), Seniors Real Estate Specialist (SRES), Red Cross Volunteer - Greater Kansas City Chapter, Supportor of Cross-Lines Community Outreach.

 
 

ReeceNichols Real Estate

8001 College Blvd Suiite 100

Overland Park, KS 66210

Office: (913) 451-4415
Cell: (913) 333-8310
   
 http://www.overlandparkhomelocator.com/  
 

                                 

 

Comments(7)

Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Carol

Should a very interest case, I'll look forward hearing about the outcome.

Good luck and success.

Lou Ludwig

Mar 30, 2010 11:56 AM
Steven L. Smith
King of the House Home Inspection, Inc. - Bellingham, WA
Bellingham WA Home Inspector

Carol,

The way the states are grubbing around for bucks, there might be more.

Mar 30, 2010 01:50 PM
Patricia Kennedy
RLAH@properties - Washington, DC
Home in the Capital

Carol, down here the local jurisdictions have a 3% transfer tax that the buyers and sellers split.  They don't care whether you get a loan or pay cash.

Mar 30, 2010 03:53 PM
Steve Shatsky
Dallas, TX

Hi Carol... this will be an interesting case to watch.  Could have an far reaching effect on the market if it's successful!

Mar 30, 2010 04:28 PM
Charles Buell
Charles Buell Inspections Inc. - Seattle, WA
Seattle Home Inspector

Carol, like Steve says----this may be more "creative State financing"----like these camera traffic tickets that are raking in the big bucks for cities.

Mar 30, 2010 05:05 PM
Jennifer Fivelsdal
JFIVE Home Realty LLC | 845-758-6842|162 Deer Run Rd Red Hook NY 12571 - Rhinebeck, NY
Mid Hudson Valley real estate connection

Carol this will be an interesting case to watch I can see how this could even open up other lawsuits based on the outcome of this one.

Mar 31, 2010 01:38 AM
Gary Woltal
Keller Williams Realty - Flower Mound, TX
Assoc. Broker Realtor SFR Dallas Ft. Worth

Hi Carol. The state of New York has more odd taxes they come at you with. I have never heard of this one.

Mar 31, 2010 01:38 PM