On Nov. 18, 2011, Freddie Mac amended its policy regarding its mandatory short sale affidavits.
The purpose of the affidavit is to prevent fraud by requiring the buyer, the seller, the real estate brokers, the escrow/closing agent, and any transaction facilitator to make various certifications (including that the short sale is an arm's length transaction and the buyer will not resell within 120 days unless there are substantial improvements).
Here are the key changes to the affidavit:
• The certification is now made based on "the best of each signatory's knowledge and belief." Freddie has retained the statement that a signatory making "a negligent or intentional misrepresentation" agrees to indemnify the servicer and Freddie Mac for losses. The addition of the knowledge standard significantly reduces this liability.
• Only a signatory who makes a negligent or intentional misrepresentation, based on the best of his or her knowledge and belief, is responsible for indemnifying the servicer and Freddie Mac for any loss. No signatory is responsible for the certification of any other signatory.
• Although Freddie Mac is requiring all signatories to sign one affidavit, the amended policy no longer allows the affidavit to be an addendum to the sales contract.
Servicers are required to implement the changes by Jan. 1, 2012, but are encouraged to do so immediately. Each servicer covered by the policy must update its forms to comply with the revised policy.
Posted by Bradford Miller Law, P.C.
Real Estate Law, Landlord Tenant Law, Estate Planning
134 N. LaSalle, Suite 2250
Chicago, IL 60602
312-238-9298
http://www.bradfordmillerlaw.com
Offering free legal representation to homeowners seeking a short sale
Key words: Chicago short sale attorney, Chicago landlord tenant law attorney, Chicago estate planning attorney, Chicago real estate attorney, Chicago real estate lawyer, Chicago building code violations, short sale attorney Chicago. This is intended to be advertising. Please consult with an attorney before acting on any information given here.
