Bulletin: SLS2011021

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.   

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