Problems with the Freddie Mac affidavit created excessive liability for real estate licensees. The short sale affidavit was originally created to limit illegal flipping and other types of fraud. The current affidavit makes licensees liable for the false certification of the buyer, whether negligent or intentional.
The updated affidavit, which goes into effect January 1, 2012, greatly affects your liability. With the new affidavit, your responsibility to pay for someone else’s false certification is now gone. You are only responsible for your own certification, based on your best knowledge and belief.
In another update, the affidavit is no longer part of the sales contract. The sales contract is between the buyer and seller, and it was the position of NAR to remove the licensee(s) and other parties from the contract and any disputes arising from their own agreement.
Under the old form, the broker is required to sign the affidavit. Because the broker is usually not familiar with the deal, the agent’s signature on behalf of the broker will now be acceptable.
If you’re wondering if the servicer is using the old language or the updated language, take a look at the
Freddie Mac Amends Short Sale Policy page of the NAR Government Affairs section of realtor.org.
REALTORS® should take a look at these, and if they’re being offered the old affidavit form, ask the servicer to use the new form. Even though they have until Jan 1, 2012 to issue it, insist they make changes to the old form so you’re not liable for a false certification of any other party to the transaction.
Below is a video from REALTOR® Magazine that helps clarify the changes.