I am a seller and trying to close on my house. The buyers will not sign the "Arms Length" affidavit provided by Chase. We then realized that the affidavit they were using was an old one and a new affidavit provided by Freddie Mac satisfies the buyers concerns. The problem is, our Chase negotiator refuses to updated their affidavit with the new terms.
There are other Chase offices that have began using the new form.
Has anyone else experienced this? Or know who to contact?
I've attached the updated affidavit.Freddie_Mac_Policy-New%281%29.pdf
Replies are closed for this discussion.
What is it that your buyers find objectionable? What is the difference between new and old?
Enlighten us :>)
Below is the bulletin that outlines the changes. Basically it was that ALL parties involved in the signing of the affidavit could be held liable for the deficiency. The new affidavit states the following:
"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."
Our buyer does not want to sign a document that puts him liable if I was committing some sort of Short Sale fraud and vice versa.
On Nov. 18, 2011, at the request of NAR and the American Land Title Association (ALTA), 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). 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.
NAR members are encouraged to make sure they are signing an updated form and, if presented with an old form, are well-advised to request the servicer to update or allow amendments to the form before they sign, to avoid potential liability issues.
Here are the key changes:
Interestingly, this week on a large foreclosure, Chase provided for the 1st mortgage an arms length affidavit that was on all fours with the new Freddie Mac requirements. But Chase as the 2nd mortgagee provided a different version of the affidavit! The big difference in the 2nd is that it did not allow for any post closing occupancy, but the 1st allowed up to 90 days.
Both letters limited liability to the misrepresentations of the signor (no vicarious liability relating to other's statements).
It would seem that contacting Freddie Mac and complaining that Chase refuses to use their current arms-length which your buyers and sellers have signed (I'd have them sign it - help hammer the point), could they please make Chase use current Freddie docs? would be a way to go. I would probably email the doc, too - just extra push and makes it harder for Chase to later claim that they missed a deadline to sign the document.
Well after working with our Senator, we were able to get Chase to change the affidavit. Great news all around....