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PIW Fee to be Waived in 2017

Fannie Mae will no longer charge a fee to exercise a Property Inspection Waiver (PIW) due to customer feedback. This change will become effective January 1, 2017, the process for a Property Inspection Waiver will not change, but the $75 fee will no longer apply.

A Property Inspection Waiver is an offer to waive the appraisal necessary for most loans, for certain refinance transactions. A PIW is issued through Desktop Underwriter (DU) using Fannie Mae’s database of more than 20 million appraisal reports in combination with proprietary analytics from Collateral Underwriter (CU); these factors determine the minimum level of property valuation required for loans.

When a Desktop Underwriter loan casefile receives a PIW offer, Fannie Mae accepts the value estimate submitted by the lender as the market value for the subject property; waiving the need for an appraisal. If, however, the lender has reason to believe the property’s current market value should be confirmed, they must order an appraisal. For example, a property located in an area impacted by a recent disaster should always order an appraisal. Purchase transactions and the majority of refinance transactions will NOT receive a PIW offer, which means they will require an appraisal by a qualified residential appraiser to determine the market value.

A PIW offer will be considered for: one unit properties, including condominiums, principal residence, second home, and investment property transactions, limited cash-out refinance transactions up to a 90% LTV/CLTV for principal residences and second homes; up to 75% LTV/CLTV for investment properties, Cash-out refinance transactions up to a 70% LTV/CLTV for principal residences; up to a 60% LTV/CLTV for second and investment properties.

For a PIW to be considered a prior appraisal must be found for the subject property in Fannie Mae’s Collateral Underwriter data; that appraisal must be associated with at least one of the borrowers on the loan casefile. In some cases, the prior appraisal, though the property address match is found in CU and the borrowers on the casefile match, may not be acceptable. For example, if a CU “Overvaluation Flag” was issues on the prior appraisal, or the appraisal could not be scored, the prior appraisal will not be used and a PIW will NOT be offered on the new loan case file.

Written by Central Coast Lending - Go to Central Coast Lending's Website/Profile
805.543.LOAN info@centralcoastlending.com