Freddie Mac and Fannie Mae, government-sponsored purchasers of home mortgages, have asked their mortgage servicers to review the policies and procedures of affidavits in foreclosure documents.
Affidavits used in foreclosure proceedings may have been executed improperly and without proper notarizations.
In separate lender letters, sent on October 1, 2010, Freddie Mac and Fannie Mae, indicated that defects in the process, including whether individuals executing affidavits on behalf of servicers have the required personal knowledge to complete the documents and whether the documents were properly notarized.
Under the Freddie Mac and Fannie Mae mortgage contracts with servicers, a servicer must “take prompt and diligent action consistent with applicable law or regulations to foreclose on a loan, and properly manage, dispose of, and effect proper conveyance of title to a foreclosed property …”
The review of foreclosure documents must be completed by October 18, 2010. In addition, the review must include all Freddie Mac and Fannie Mae foreclosures that are either pending or within the “applicable judgment review period for the relevant jurisdiction.”
Servicers must notify Freddie Mac and Fannie Mae of any identified deficiencies within the foreclosure documents. If deficiencies are found, the servicers “must remedy any deficiencies to ensure compliance with applicable law” and their servicing requirements.