Bill Meek: Mortgage fee is appropriate
12/10/2013 12:00 AM
12/09/2013 5:44 PM
If the mortgage registration fee is removed by the Legislature, one of two things will happen. You will have dramatic decreases in service or, most likely, your mill levy will rise.
If the mill levy increases, this will cost everyone in our county. You would then be paying for everyone else’s mortgage registration fee, not just yours. That is vastly unjust.
Currently in Kansas, if you don’t use the fee you don’t pay for the fee.
A letter writer said the mortgage fee is an unfair tax (Dec. 4 Letters to the Editor). Many states bordering Kansas charge other fees, such as a transfer tax, and higher document fees to file instruments relating to land records.
The mortgage registration fee goes into the county general fund. Once the mortgage is filed in the Register of Deeds Office, it is put on record and permanently archived. Once a mortgage is filed and worked with the register of deeds, it also goes through the offices of the county clerk, appraiser and treasurer to be processed. The information technology department is involved through this entire process. The County Treasurer’s Office does the billing; checks daily and monthly that the mortgage company has indeed paid the taxes; and, when the mortgage is paid off, then changes the billing to the owner.
The mortgage registration fee was set up in the early 1900s as a funding source for the county, considering all of the county offices and functions a mortgage has to go through to ensure proper handling.
In the early 1900s, the Legislature also changed the Kansas Constitution to accommodate this law. It was approved by the citizens of Kansas.
The transfer tax in other states is paid every time the property transfers ownership.
A claim has been made that if you refile your mortgage, you have to pay the tax again. This is not necessarily true. In Kansas you have recorded assignments and unrecorded assignments. For example, if Bank A has the original mortgage and you want Bank B to refinance your mortgage, Bank A can formally assign the document to Bank B with the Register of Deeds to put on record. If Bank B submits an affidavit of previously paid mortgage, no tax is due.
The mortgage registration fee is an appropriate source of revenue to pay for the services that multiple county offices provide – not just the Register of Deeds Office. The choice is simple – either those Kansans utilizing a mortgage can pay for the services at the time they receive them, or all property owners can pay for these services every year through property taxes.
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