Bulletin: SLS2011021

Date:
November 23, 2011
To:
All Issuing Offices
RE:
Freddie Mac Short Sale Affidavit Requirements

Dear Associates: 

Freddie Mac recently issued Bulletin 2011-23, dated November 18, 2011, which updates and revises Freddie Mac’s Single-Family Seller/Servicer Guide (the "Guide") with respect to affidavits that Freddie Mac requires in connection with a short sale. Click here to view a copy of Bulletin 2011-23. 

Bulletin 2011-23 revises Freddie Mac’s requirements for short sale affidavits as contained in Chapter B65, Section B65.40, titled "Approval Conditions." 

The revisions to the short sale affidavit requirements clarify that: 

(1) statements made in the required affidavit are made to the best of each signatory’s knowledge and belief, and

(2) each signatory to a required affidavit is liable for his or her negligent or intentional misrepresentations, but not those of other signatories to the affidavit.

These changes are intended to ameliorate some of the concerns that settlement agents have expressed regarding short sale affidavits. The changes also provide additional guidance with respect to the short sale affidavit, including the information that must be included in the affidavit. Click here to view Section B65.40, Approval Conditions, marked to show changes. 

These changes are effective for short payoffs approved on and after January 1, 2012. However, Bulletin 2011-23 encourages lenders to incorporate these changes immediately. 

Closing agents in a jurisdiction such as Texas that prohibits indemnities by title companies or agents should note that these revisions do not affect the existing provisions of Section B65.40 permitting a lender to waive the closing agent’s affidavit, upon request, in the event a closing agent is prohibited from signing the affidavit by applicable local, state or federal law.

If you have any questions relating to this or other bulletins, please contact a Stewart Title Guaranty Company underwriter.   

For on-line viewing of this and other bulletins, please log onto www.vuwriter.com.  

THIS BULLETIN IS FURNISHED TO INFORM YOU OF CURRENT DEVELOPMENTS. AS A REMINDER, YOU ARE CHARGED WITH KNOWLEDGE OF THE CONTENT ON VIRTUAL UNDERWRITER  AS IT EXISTS FROM TIME TO TIME AS IT APPLIES TO YOU, AS WELL AS ANY OTHER INSTRUCTIONS. OUR UNDERWRITING AGREEMENTS DO NOT AUTHORIZE OUR ISSUING AGENTS TO ENGAGE IN SETTLEMENTS OR CLOSINGS ON BEHALF OF STEWART TITLE GUARANTY COMPANY. THIS BULLETIN IS NOT INTENDED TO DIRECT YOUR ESCROW OR SETTLEMENT PRACTICES OR TO CHANGE PROVISIONS OF APPLICABLE UNDERWRITING AGREEMENTS. CONFIDENTIAL, PROPRIETARY, OR NONPUBLIC PERSONAL INFORMATION SHOULD NEVER BE SHARED OR DISSEMINATED EXCEPT AS ALLOWED BY LAW. IF APPLICABLE STATE LAW OR REGULATION IMPOSES ADDITIONAL REQUIREMENTS, YOU SHOULD CONTINUE TO COMPLY WITH THOSE REQUIREMENTS.

References

Bulletins Replaced:
None
Related Bulletins:
CA000024 Distressed Homeowner/Short Sale Transactions
 
FL2008002 Short Sale Transactions
 
GA2008001 Short Sale Transactions
 
SLS00234 Loan Fraud (Replaces both SLS00229 and SLS00230)
 
SLS2009005 Short Sales
 
SLS2010004 Short Sales
 
SLS2011007 Short Sale Transactions
Underwriting Manual:
None
Exceptions Manual:
None
Forms:
None