Freddie Issues Rule Changes on Short Sales

Posted by The Cascade Team Real Estate on Monday, November 21st, 2011 at 8:59am

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Daily Real Estate News | Monday, November 21, 2011

As of Jan. 1, Freddie Mac will require parties involved in a short sale to sign affidavits that will make them liable for any negligent or intentional misrepresentations in the transaction, HousingWire reports. Mortgage servicers are being urged to implement the change immediately before the Jan. 1 mandate, however. 

The move is part of Freddie Mac’s effort to crack down on the rising incidences of short-sale fraud.

"With this change, you will have more information to identify potential mortgage fraud and a clearer understanding of the intent of all parties involved in the real estate transaction," Freddie said in a statement announcing the rule changes to mortgage servicers last Friday. 

In its guidance, Freddie also eliminated a requirement that borrowers who are more than 120 days delinquent are required to list their home for sale before becoming eligible for a deed-in-lieu. The rule changes also included efforts to help mortgage servicers speed up the loss-mitigation process. 

Read more about Freddie Mac’s new requirements for short sales.

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