What comes to mind when you hear the terms appraisal waiver or property inspection waiver (PIW)? These became hot topics in 2020 and 2021 when Fannie and Freddie started using data collected to “waive” the need for an appraisal to substantiate value. They accepted the value the lender entered and no longer relied on an appraiser assigning a subjective value to the home. It reduced costs and sped up the buying and selling process. The next step was figuring out how to leverage this on a greater population of homes.
In March of this year, Fannie Mae announced its expansion of options for lenders to use to evaluate the collateral value (home value). The new system employs 8+ years of data collection and provides guidelines on how to verify aspects of the property. This allows for reduced time and costs while still verifying the property information in real time. Here is how it works:
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Automated Underwriting will identify if the home qualifies for this appraisal waiver and property data collection.
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The lender will utilize a company who sends someone out to verify specific aspects of the property.
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The collected data is uploaded to the Fannie Mae software to determine if the property is accepted or if further analysis is required.
Will this actually speed up the value and collateral review process? Will it make it less expensive to a consumer? Only time will tell.
Most lending institutions have been slow to embark on this as there are too few vendors providing these services at a reduced enough rate that would make it less expensive than a traditional appraisal, particularly in Illinois. In other parts of the country where a standard appraisal could run between $750-$1000, this process might gain traction sooner.
At Key Mortgage, we are ready to take advantage of this process if the value proposition exists and it does not put undue pressure on the transaction.
Want more information on this topic? Been hearing about this but don’t know how it will affect your buyers or listings? Our Key Mortgage loan officers are here to break it down so you are in the know and look your best to your clients.
