How are you Handling Freddie Mac Short Sale Addendums?

  • 09/14/2011 8:37 AM
    Message # 699229
    In an attempt to minimize short sale fraud, Freddie Mac has begun insisting on an "addendum" in which all of the parties -- and the escrow/closing agent -- are required to represent under penalty of perjury that the buyer and seller are unrelated (including by previous business dealings), that there are no secret payments or resale contracts, and the like.   

    These documents impose significant liability on a title agent, for something they rarely if ever know.   

    Does your firm accept this liability?   Have you been successful in getting the lender to adjust the form?   Do you ask the Realtors to give you the same representation -- figuring they've been working with these folks and have more knowledge?   How do you handle these requests?

    Our friends at ALTA have been working with Freddie -- unsuccessfully as yet.   More here 
  • 09/14/2011 1:27 PM
    Reply # 699445 on 699229

    Community Land Title is working, correction, trying to work one of those right now. I have a major problem with the representations they're requiring of us; it's totally unrealistic to ask a title agent to make such assurances. It's not real world thinking.

    I inquired about same with one of our underwriters, advice given: "I wouldn't sign it." -- I'd say that's pretty good advice. Lets hope cooler heads prevail.

    Bob Booth / Community Land Title

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