Butler County Times Gazette
  • County discusses Mortgage Registration Fee bill

  • Mortgage Registration Fee bill has been a cause for concern for the Butler County Commission
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  • The upcoming Kansas Senate vote for Bill 298, otherwise known as the Mortgage Registration Fee bill, has been a cause for concern for the Butler County Commission.
    “We were asked to look into Senate Bill 298 which came out of committee last week,” said County Clerk Don Engels. “If the bill passes as it is currently stated the county will see a dramatic loss in funding. The mortgage registration fee is the bulk of the revenue for the register of deeds. It is a .25 percent fee added onto the balance of the mortgage of a home. This bill will reduce that fee collection by 20 percent per year until it’s eliminated completely in 2019. The recording fee will slightly increase in an attempt to offset the registration over the next five years.”
    “The same reduction in mortgage registration fees shows a significant change in recording fees,” explained Register of Deeds Marcia McCoy. “The senate bill plans to increase it $1 per page. They will have to increase dramatically to keep us from losing a large chunk of our budget.”
    The commission questioned how much revenue would be lost within the first year.
    “If the bill goes through, next year the county will face a $123,270 loss of revenue,” said Engels.
    The commission began to question who would really benefit from the action of removing the fees.
    “The high-end homes are clearly the winners,” said County Administrator Will Johnson. “The low-end homes lose. All homes will probably be in the win a little bit because we’re not bringing in the revenues.”
    “When you increase the page fees, the businesses will win over the consumers,” said Commissioner Peggy Palmer.
    “An individual doesn’t see the fee quite as much because it is built into the closing costs” explained McCoy. “The mortgage fee is a user fee. It was not applied to every home purchase.”
    The question of why the bill would be pushed into the Senate so urgently was called into question.
    “They’re concentrating on the operation of the Register of deeds and not seeing what all that fee is used to cover,” said Commissioner Dan Woydziak.
    “But how is this action going to help the consumer?” questioned Palmer.
    “The consumer will save with this as opposed to the county,” said Johnson.
    “If you buy land through a federally held land bank, you don’t pay a registration fee,” said Woydziak. “The same is if you pay cash.”
    Page 2 of 3 - “Those mortgages counted for less than 6 percent of our overall numbers for last year,” said McCoy.
    Commissioner Palmer again questioned who would be winning.
    “The winners are those people either buying or refinancing high-end homes,” said Johnson. “Those people with $300,000 and higher homes. They’re paying more than $1,000 in registration fees alone. That’s who really wins.”
    “Is it the intent here to force the county to make up that loss with property taxes?” asked Masterson. “Because if that’s the case, those with the $5,000,000 home will be paying higher property taxes.”
    “Some will and some won’t,” said Johnson. “All of the fees that we currently charge are statutory.”
    “We can’t make up our own fee rates for this,” said McCoy. “The fee was set originally in 1925 and it has not increased since the one percent was added for the Heritage Fund.”
    “What I don’t understand is why this bill is on such a fast track,” commented Woydziak. “Most of the time the bill is presented and there are changes made over the course of several years. This one was brought up last fall and it has already come out of committee.”
    “This fee is being sold as a hidden fee,” said Masterson. “We’re generating a lot more money than they think we need. We’re using that money in the Register of Deeds office.”
    Commissioner Palmer was still struggling with the motivation of those proposing the bill.
    “This is such a complicated thing now,” said Palmer. “It was so simple and everybody knew what was going on before they decided to try to change everything. I’m not sure of the purpose here.”
    “I’ve been to a lot of closings and I’ve never heard of anyone complain about the mortgage registration fees,” said Commissioner Mike Wheeler.
    “Is there anything in this bill that prevents the county from adding some additional fees that would be triggered by a mortgage registration type of action?” asked Commissioner Ed Myers.
    “Off the cuff, I would say no, but I would have to look at things very closely in statute,” said Johnson.
    “Some states do have a fee similar to what you’re suggesting, Commissioner,” explained McCoy. “It is called a transfer fee.”
    “This is absolutely ridiculous,” commented Palmer. “There is no better word for this. We certainly don’t want to increase property taxes. What we need is our constituents to make calls. We need them to tell the representatives this is not a good idea.”
    Page 3 of 3 - Kari Adams can be reached at kadams@butlercountytimesgazette.com.
     

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