NAR seeks federal ban on private transfer fees

A coalition of consumer advocates, unions and real estate industry groups is seeking a federal ban on private transfer fee covenants, a technique used to finance the capital costs of some new developments through fees that are collected every time a home changes hands.

Proponents say the technique -- also known as reconveyance financing -- can make new homes more affordable by spreading the costs of building a subdivision's infrastructure out over time. The fees, usually 1 percent, "run with the land" and are typically in force for 99 years.

Critics -- including the National Association of Realtors, the American Land Title Association, the Center for Responsible Lending and the American Federation of State, County and Municipal Employees (AFSCME) -- have banded together as the "Coalition to Stop Wall Street Home Resale Fees."

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