Freddie Mac Faces Class Action Lawsuit

Federal Home Loan Mortgage Corp. (“Freddie Mac”) is facing a potential class action lawsuit that accuses the company of promising at foreclosure sales that it will pay for the buyer’s title insurance if the buyer agrees to use the title insurance company utilized by Freddie Mac’s agent, but then “universally” refuses to do it.

“This is a case of Freddie Mac making promises it has no intention of keeping,” says the class action lawsuit, filed in Massachusetts Superior Court. “Freddie Mac universally and wrongfully refuses to honor this promise, yet continues to make the promise over and over again knowing full well that it will not honor it….and will likely continue to do so unless enjoined by this Court.”

The Freddie Mac class action lawsuit goes on to say this refusal to honor its promise forces every purchaser of a Massachusetts property from Freddie Mac to either (i) back out of a valid contract for the purchase of a property, usually putting a security down payment or other damages at risk; (ii) proceed with the sale and purchase an owner’s policy at his or her own expense; or (iii) proceed with the sale and leave the property uninsured and at risk indefinitely.

The Freddie Mac lawsuit is seeking class action status on behalf of anyone who purchased Massachusetts real estate from Freddie Mac subject to the Addendum agreement, or promise, described within the lawsuit. It is seeking an award of damages, including the value of the owner’s policies of title insurance, damages for actual harm, and statutory damages where applicable for Breach of Contract, and Breach of Covenant of Good Faith and Fair Dealing.

A copy of the Freddie Mac Foreclosure Class Action Lawsuit can be read here. The case is Rebecca Urban, et al. v. Federal Home Loan Mortgage Corporation.