In a recent bulletin, Freddie Mac announced several revisions to some of its appraisal requirements.
The first revision will remove the requirement to obtain a new appraisal when the settlement date is more than 120 days after the note date. When this occurs, sellers must now warrant that the value of the subject property is not less than either the appraised value as of the effective date of the appraisal or the estimated value or sales price used to underwrite the mortgage in Loan Product Advisor® when mortgages are originated with an ACE appraisal waiver.
If the seller can’t make this warranty, then the mortgage is eligible for sale only through a negotiated sales transaction through Freddie’s bulk sales unit.
The GSE’s second revision makes updates to the Loan Collateral Advisor’s collateral representation and warranty relief, as well as its automated collateral evaluation (ACE) eligibility requirements:
- Removed the requirement that mortgages with appraisals that received collateral representation and warranty relief through Loan Collateral Advisor® with settlement dates more than 120 days after the note date are not eligible for collateral representation and warranty relief.
- Removed the requirement that mortgages with settlement dates more than 120 days after the note date are not eligible to be sold with an ACE appraisal waiver.
Freddie’s third revision makes changes to its reporting and appraiser requirements for obtaining an appraisal update. These changes will become effective for mortgages with settlement dates on or after January 18, 2018:
- Reporting Requirement: When an appraisal update is required, the results of the appraisal update must be reported on Form 442.
- Appraiser Requirement: The original appraiser should perform the appraisal update. If the original appraiser is not available, another appraiser may be used. Appraisal updates performed by an unlicensed or trainee (or similar classification) appraiser will be accepted by Freddie Mac if a supervisory appraiser signs the update.
For more information, check out the GSE’s bulletin.
Freddie Mac – freddiemac.com