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Homebuyer Can Hold Freddie's Feet to the Fire
Homebuyer Can Hold Freddie's Feet to the Fire
(CN) - Freddie Mac may be liable for refusing to pay for a homebuyer's title insurance policy, telling her "that is how it is" after she complained that the offer was promised in her contract, a federal judge ruled.
Rebecca Urban bought a foreclosed property located in Lancaster, Mass., in 2010 from the Federal Home Loan Mortgage Corporation (Freddie Mac) in a public sale.
An addendum to the contract of the sale stated that, "if purchaser agrees to use the title insurance company utilized by the seller's attorney or agent, then seller agrees to pay for purchaser's owner's title policy." Title insurance protects an owner from financial loss caused by title defects or liens upon the property.
Urban claimed that Freddie Mac made the attractive offer to induce her purchase.
After she signed, however, Freddie Mac allegedly refused to honor the provision. An attorney for the government-controlled company responded with "words to the substantial effect of: 'We get this question all the time. Freddie Mac does not honor that provision in Massachusetts. We told them this is a problem, but that is how it is,'" according to the complaint.
http://www.courthousenews.com/2012/01/31/43509.htm
