Home buyers and home sellers doing Freddie Mac-approved short sales will no longer be responsible if anyone else involved in the transaction commits fraud, as long as the buyer or seller didn’t know about the fraud.

Previously, everyone involved in a short sale, including the buyer, the seller, the real estate agent, the closing agent, and the negotiator, had to sign an affidavit saying the other people and companies involved in the sale weren’t in cahoots with each other.

And, buyers and sellers could be held responsible for any fraud committed even though they had no way of knowing whether those on the other side of the sales transaction were lying.

Short sales are deals in which the mortgage lender allows the home owner to sell his home for less than what the home owner owes the lender.

Freddie Mac created the original affidavit to make sure that everyone involved in the short sale was unrelated and that the buyer was not buying the short sale just to turn around and re-sell at a higher price within the first few months after buying it.

The new affidavit asks you to confirms that to the best of your knowledge and belief the deal is being made between unrelated parties and that you aren’t making any misrepresentations.