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Multifamily Document Reform Implementation Frequently Asked Questions

Borrower's Oath

If you have a question related to this document, please submit it to MultifamilyDocumentReview@hud.gov.

   

  1. 12/19/2013
    The Borrower's Oath published in HUDCLIPS includes a standard form of oath administered by a Notary.  In my experience, most lenders' lawyers rewrite the oath and make it a simple acknowledgement.  They say they are following the instructions from local title companies on the use of acknowledgement, seemingly unaware that an acknowledgement is not an oath, and the National Housing Act specifically requires an oath.  The form states:  NOTE: THE FOREGOING CERTIFICATION MUST BE GIVEN UNDER OATH IN ACCORDANCE WITH STATE LAW REQUIREMENTS FOR TAKING AN OATH.  That's clear enough.  The form also instructs the parties: {ADD ADDITIONAL LINES AND NOTARY ACKNOWLEDGEMENTS IF MORE THAN ONE SIGNATORY}  It may be that this instruction confuses the issue.  Anything you can do to emphasize the need for an oath rather an acknowledgement will be appreciated.
     
  
 

1.  Should the Borrowers Oath appear on the 223(f) checklist? It does not appear on the checklist.

Yes, it should be on all checklists. Please add it to any checklist that it does not appear on.

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2.  12/19/2013
The Borrower's Oath published in HUDCLIPS includes a standard form of oath administered by a Notary.  In my experience, most lenders' lawyers rewrite the oath and make it a simple acknowledgement.  They say they are following the instructions from local title companies on the use of acknowledgement, seemingly unaware that an acknowledgement is not an oath, and the National Housing Act specifically requires an oath.  The form states:  NOTE: THE FOREGOING CERTIFICATION MUST BE GIVEN UNDER OATH IN ACCORDANCE WITH STATE LAW REQUIREMENTS FOR TAKING AN OATH.  That's clear enough.  The form also instructs the parties: {ADD ADDITIONAL LINES AND NOTARY ACKNOWLEDGEMENTS IF MORE THAN ONE SIGNATORY}  It may be that this instruction confuses the issue.  Anything you can do to emphasize the need for an oath rather an acknowledgement will be appreciated.

This question raises a critical point that cannot be emphasized enough.  Section 207(b)(2) of the National Housing Act, 12 U.S.C. 1713(b)(2), states the following:  "...the Secretary may not insure any mortgage under this section ... unless the mortgagor certifies under oath that in selecting tenants for the property covered by the mortgage he will not discriminate ..., such certification shall be filed with the Secretary.  Violation of any such certification shall be a misdemeanor punishable by a fine not to exceed $500."  The Borrower's Oath, when made under oath in accordance with state law requirements for taking an oath with a notary's acknowledgement of the oath, fulfills the requirement of Section 207(b)(2).  It is the policy of HUD to apply this requirement to all multifamily insured rental properties regardless of whether they are insured under Section 207 or under another section of the National Housing Act.  The instructions on the Form must be followed precisely; an acknowledgement is not acceptable and should never be accepted as a substitute at closing.  This requirement will not be waived.  Please direct closing counsel and the title company to the statute, if necessary.

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