Georgia Counties suing FannieMae, FreddieMac, HSBC | Individual.com

Hundreds of millions of dollars are on the line as Georgia counties turn to the courts to recoup money they lost after the real estate meltdown.

It’s unclear how much the litigation could cost the counties to pursue. But, if they’re successful, local taxpayers could reap hundreds of millions of dollars that could shore up public services at a time when governments are cutting back.

Fulton County alone faces a budget deficit of nearly $114 million in 2014.

In a series of lawsuits filed over the last year, Fulton, Gwinnett, DeKalb, Cobb and other Georgia counties maintain that Fannie Mae and Freddie Mac illegally avoided real estate transfer taxes on foreclosed properties they sold.

Several metro counties also have sued the British bank HSBC, which they maintain was one of the worst offenders of predatory lending practices. Those practices, the counties say, contributed to the foreclosure crisis, cost counties tax revenue and increased public expenses related to abandoned properties.

The mortgage agencies say they’re exempt from the local taxes under federal law, while HSBC says the counties can’t blame their troubles on the bank. A law professor who has studied the recession’s impact on local governments thinks the counties will be hard pressed to prevail in the litigation.

via Individual.com.