I recently blogged about the increasing occurrence of Appraisal Waivers.
If a particular property is already in Fannie Mae’s or Freddie Mac’s database, it could be eligible for an Appraisal Waiver, meaning no property inspection or appraisal will be required.
Some lenders are offering to check for possible appraisal waiver status for particular properties for both listing and selling agents.
They market this service as a tool that will enable buyers to waive appraisal contingencies; this of course makes listings more enticing and offers much stronger.
BUT – waiving an appraisal contingency based on an “appraisal waiver” finding is very dangerous b/c lenders often LOSE appraisal waivers.
This is b/c the waivers are not just based on the property address and whether or not the property is in the Fannie/Freddie database.
Appraisal waivers also rely on the strength of the borrower.
We have seen numerous appraisal waivers disappear with minor changes in assets, debt ratios, and loan-to-value ratios.
So yes, we LOVE appraisal waivers when we get them.
But, we would NEVER advise a client to waive her appraisal contingency b/c we received an “appraisal waiver” notice at the front end of the process.
Founder/Broker | JVM Lending
(855) 855-4491 | DRE# 01524255, NMLS# 310167