NEW HAVEN, Conn. (AP) - The city of Bridgeport is suing two mortgage giants, saying they failed to pay a tax on real estate transactions.
Bridgeport, Connecticut's largest city, filed the federal lawsuit Monday against Fannie Mae and Freddie Mac. Bridgeport is challenging their claim that they are exempt from an excise tax paid to municipalities and the state when real estate is sold.
Spokesmen for Fannie Mae and Freddie Mac said they don't comment on pending litigation.
The lawsuit seeks class action status on behalf of all Connecticut municipalities.
An attorney for Bridgeport said it was unclear how much is at stake in the lawsuit.
Fannie and Freddie own or guarantee about half of all U.S. mortgages, or nearly 31 million home loans.
The tax, paid for recording real estate transfers, is 1 percent of the transaction, said Anthony Musto, attorney for Bridgeport. The revenue is shared between the state and municipalities, he said.
Fannie Mae and Freddie Mac say they're exempt as governmental entities, according to the lawsuit. Bridgeport rejects that argument, saying they have been federally chartered, private stock, publicly traded corporations since 2003.
The lawsuit seeks a judgment that they are subject to the tax along with damages in an amount to be determined and penalties.