The foreclosure-document drama intensified Friday, with Fannie Mae and Freddie Mac directing all of their servicers to immediately review their policies and procedures relating to the execution of affidavits. Additionally, Bank of America says it will delay its foreclosure process in 23 states ‘in order to amend all affidavits in foreclosure cases that have not yet gone to judgment.’
Fannie Mae Executive Vice President Terry Edwards said the company is ‘disturbed’ by reports of servicers failing to properly administer foreclosure cases.
‘We strongly believe that homeowners who have exhausted all other options and are now facing foreclosure must be treated fairly and equitably,’ Edwards said in a statement. ‘Accordingly, servicers should adhere to the exact requirements of the law in all of these cases, including the proper execution of affidavits, verifications and other legal documents as part of the default process.
‘Fannie Mae servicers are required, by contract, to adhere to applicable laws and rules regarding mortgage documents, and to establish processes and controls that ensure compliance,’ he continued.
Bruce Witherell, chief operating officer for Freddie Mac, said Friday that the company ‘is deeply concerned about recent reports that there may be affidavits that were improperly executed in connection with foreclosures.’
Both government-sponsored enterprises issued letters to servicers emphasizing policies on document execution. Fannie's letter is available here, and Freddie's letter can be read here. Freddie Mac servicers must complete their reviews by Oct. 18.
A statement from Bank of America obtained by MortgageOrb says the bank has been assessing its existing affidavit processes.
SOURCES: Fannie Mae, Freddie Mac, Bank of America