Fannie Mae and Freddie Mac Update Uniform Legal Instruments

Fannie Mae and Freddie Mac have updated their uniform legal documents — security instruments, notes, riders and addenda, and special-purpose documents — used for loans delivered to them. The new instruments have July 2021 footer dates. Use of the new instruments is currently optional but will be required for loans with note dates on or after Jan. 1, 2023. The updated uniform instruments cannot be used in combination with any earlier versions. For example, a security instrument with a July 2021 footer must be used with a note that also has a July 2021 footer.

Here are the links to these new resources:

Question of the Week

Q. How do I protect my credit union from liability if I take a power of attorney?

A. To protect a credit union from liability, the person holding the power of attorney should fill out an affidavit (or certification) stating several facts:

  • First, that the person presenting himself or herself as the attorney-in-fact and signing the affidavit or declaration is the person named in the power of attorney.
  • If the attorney-in-fact is named in the power of attorney as a successor attorney-in-fact, the affidavit should include the circumstances or conditions stated in the power of attorney that have occurred that would cause that person to become the acting attorney-in-fact.
  • Further, that to the best of the attorney-in-fact’s knowledge, the principal is still alive and at the time the power of attorney was signed, the principal was competent to execute the document and was not under undue influence to sign the document.
  • In addition, that all events necessary to making the power of attorney effective have occurred.
  • The affidavit must also state that the attorney-in-fact does not have actual knowledge of the revocation, termination, limitation, or modification of the power of attorney or of the attorney-in-fact’s authority.
  • That the attorney-in-fact does not have actual knowledge of the existence of other circumstances that would limit, modify, revoke, or terminate the power of attorney or the attorney-in-fact’s authority to take the proposed action.
  • If the attorney-in-fact was married to the principal at the time of execution of the power of attorney, then at the time of signing the affidavit or declaration, the marriage of the principal and the attorney-in-fact has not been dissolved or declared invalid.
  • Lastly, that the attorney-in-fact is acting in good faith pursuant to the authority given under the power of attorney.

Idaho and Washington each have state law provisions regarding these affidavits or “certification of power of attorney.”

Related Links

RCW 11.125.430
ORS 127.035
IDS 15-12-119
ID Certification

Compliance Alerts

National Credit Union Administration

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Consumer Financial Protection Bureau

CFPB Proposes Rule to Shine New Light on Small Businesses’ Access to Credit: The CFPB issued proposed rules to implement the Dodd-Franck Act section 1071 requirement for lenders to disclose information about their lending to small businesses.  Under the proposal, lenders would be required to report the amount and type of small business credit applied for, extensive demographic information about small business credit applicants, and key elements of the price of the credit offered.

Office of Foreign Assets Control

OFAC has updated the SDN list as of Sept. 3. The last update prior to this was Aug. 24.

Posted in Compliance News, Compliance News, Compliance Question.