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Freddie Updates Appraisal Requirements

Appraisal

Updates are being made to the Federal Home Loan Mortgage Corp.’s appraisal policies. The change is being made to streamline requirements.

Freddie Mac’s underwriting guidelines require that a new appraisal is obtained when the settlement date is more than 120 days after the note date.

But in an effort to streamline appraisal policies, the McLean, Virginia-based government-sponsored enterprise is eliminating that requirement.

The secondary lender discussed the changes in Bulletin 2017-23.

Instead, sellers will be required to warrant the value of the property is not less than either the appraised value as of the appraisal’s effective date.

If the loan was originated with an ACE appraisal waiver, then the seller must warrant the estimated value or sales price used to underwrite the mortgage in Loan Product Advisor.

“If the seller cannot make this warranty, then the mortgage is eligible for sale only through a negotiated sales transaction through our bulk sales unit,” the bulletin states.

Freddie is also eliminating the requirement that loans can’t be eligible for collateral representation-and-warranty relief after the 120-day period.

In addition,
Freddie will now allow loans to be sold with an ACE appraisal waiver after 120 days.

On appraisals requiring an update, Freddie will allow an unlicensed or trainee appraiser to do the update as long as a supervisory appraiser signs the update. While this is effective on loans with settlement dates on or after January 18, 2018, sellers can immediately implement the change.

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