Skip to main content

Fannie Mae's Appraisal Review Changes Debuted January 26, 2015

 Fannie Mae's Appraisal Review Changes 
Debuted January 26, 2015    

     Fannie Mae rolled out a new safeguard for Lenders and Underwriters, as they continue to strive for Appraisal integrity and accuracy ...

     This new Lender's tool became available on January 26, 2015 ... the very same day that FHA instituted their new Mortgage Insurance Reduction.  (See my recent post, "January 26, 2015: Changes Ahead for Mortgage Financing" for details regarding FHA's changes.)

     The development of this new "Appraisal Review" tool was intended to help alert Underwriters and Lenders of inconsistencies of Appraisal data submitted through the processes "already in place".  

     To better understand what impact these changes have on the Mortgage Process, I start by explaining what steps a Lender takes regarding Appraisals ... from the initial ordering, submission, processing, and on through review.  

     Please remember:  Not all Lenders (Banks, Mortgage Companies, etc.) handle the ordering of an Appraisal in the same manner.  What follows below is a breakdown of the standard process for the handling of an Appraisal for a Conventional Mortgage ... and the process I myself use as a Chicago-area Mortgage Originator:  

     The process typically follows this course:

  • Mortgage Application taken
  • Appraisal ordered by Mortgage Lender's appointed staff-member (NOT the LO themselves)
  • Appraisal Management Company of Lender's choice, designates the Appraisal assignment to a specific Appraiser
  • Appraiser inspects property, completes the Report, and electronically sends it to the Lender  
  • Lender submits the final Appraisal version through an automated system  
  • The system makes the Report available to the Lender, Fannie Mae, and Freddie Mac simultaneously in receipt
  • The Loan Processor logs the Report into the Lender's Automated/Loan Operating System.  It's then prepared for Underwriter's Review
  • The Loan Officer and their Processing Team reviews the Appraisal for:   
           1.  Value Estimate 
           2.  Repairs needed
           3.  Conditions of Value
           4.  Accuracy
           5.  Zoning
           6.  Flood Hazard Zones
           7.  Consistency with the Title Insurance Policy
           8.  More 

  • Underwriter reviews the Appraisal Report for:
           1.  Accuracy
           2.  Consistency
           3.  Use of the most similar Comparables available
           4.  Reasonability of Value Estimate
           5.  Suitability of the collateral for Fannie Mae/Freddie Mac lending standards, among other things

     Note:  Some Lenders may have an Appraisal Review Division that adds an additional layer of protection and set-of-eyes to determine the overall reliability of the Appraisal Report.
     As of January 26, 2015, one more layer of Appraisal Review was added.  Fannie Mae's CU (Collateral Underwriter) was introduced to help screen "risky" Appraisals and any inadequacies and inconsistencies that might be found within them.  

     How Lenders' Underwriters utilize this new tool is still being revealed.  But it certainly puts more pressure on Appraisers to provide accurate, consistent, well-documented, well-explained Reports ...  

     *  Hoping to Buy, Build, or Refinance within the Chicagoland area?  Or have a client in need of Mortgage answers or service?  Contact Me today!  I'll put my 37 years of Mortgage experience and expertise hard to work on your behalf.
     I can be easily found at:
Direct:  815.524.2280
Cell/Text:  708.921.6331
eFax: 1.815.524.2281

 Twitter Account of Gene Mundt, Mortgage Lender   LinkedIn Account of Gene Mundt, Mortgage Lender   Facebook Acct. of Gene Mundt, Mortgage Lender   Pinterest Acct. of Gene Mundt, Mortgage Lender   
 Trulia Acct. of Gene Mundt, Mortgage Lender   Zillow Acct. of Gene Mundt, Mortgage Lender Gene's Chicagoland Blog/Gene Mundt, Mortgage Lender 
Gene Mundt, Mortgage Originator, an Originator with 37 years of mortgage experience, will offer you exemplary mortgage service and advice when seeking:  Conventional, FHA, VA, Jumbo, USDA, and Portfolio Loans in Chicago and the greater Chicagoland region, including:  The Lincoln-Way Area, Will County, (New Lenox, Frankfort, Mokena, Manhattan, Joliet, Shorewood, Crest Hill, Plainfield, Bolingbrook, Romeoville, Naperville, etc.), DuPage County, the City of Chicago, Cook County, and elsewhere within IL & WI.  

Your Referrals are Appreciated! 



Popular posts from this blog

Property Addresses: Gettin' Down to the Nitty Gritty

Property Addresses:   Gettin' Down to the Nitty Gritty

Take just a second and read through the following statements ...

“The devil is in the details” 
... "in life, it is often the tiny details that end up 
being the most important"

"Get Down To The Nitty Gritty"

“Little details have special talents in 
creating big problems!” 

“Sweat the details”

"Success is the sum of details"

Details ...Details ... it's all about the details ...
     And I'll admit it, I'm a bit of a nerd about them.  My whole family is.  Details, the intricacies, the little things ... they matter to us.
When I was growing up, a typical conversation (and argument) between my brothers and myself at the dinner table or in the backyard centered around "details".  It didn't matter what the topic was, it was the minor differences ... the details about the topic ... that we argued about.  I'm sure we drove our parents crazy.  
Sports statistics and games ... minutiae rega…

Ready for Fall? It's Arriving Soon

Ready for Fall?  It's Arriving Soon

Friend ...

Maybe it's because football season has started. Maybe it's the kids being back in school. Or because the night air is cooler. But a sense of Fall has arrived here in Chicagoland ...

The Fall Season brings changes with it. Changes in temperatures. Changes to the clothing we wear. Our focus seems to shift with the coming of shorter days, falling leaves, and crisp air.

Fall can be the perfect time to do a multitude of things. You can prep your home for the upcoming winter weather ... or for Fall listing and sale. 

But whether you're moving on or staying put, Fall is a great time to declutter and organize your home inside and out ... and your finances too.

I've googled like crazy to find interesting articles filled with Fall info, ideas, tips, and photos. Articles that will help you usher the Fall Season in at your house. I hope you enjoy reading the articles offered below and that they inspire you to make any needed changes.


Paper or Paperless billing? Which serves YOUR needs best?

Paper or Paperless billing?  Which serves YOUR needs best?

These days, companies are under pressure to go "green" and become more environmentally friendly.  As a result, an increasing number of businesses are offering their customers a paperless option with which to receive and pay their bills. 

There are obviously many positives to be found within these paperless services:

Trees are saved  Reduced postage costs  Less paper documentation to organize or save/storePossible rewards for switching to paperlessPayments can often be made/posted same-dayAutomated payments can be set-upMore
But I can tell you from my vantage point as a Chicagoland/IL/WI Mortgage Originator, there are also negatives to be found within paperless methods.  For some of my mortgage clients, the choice of going "paperless" just hasn't worked well.

 For some, an email or text reminder regarding payment of bills has not been enough. They NEED a paper billing to arrive in their mail. 

Their paper bil…