For loans sold to the secondary market, we're hearing that our investors are accepting these waivers in place of an appraisal. It's not eligible for every Fannie/Freddie file, but if the system (DU/CU) has enough good information on the property and the borrower meets certain conditions (SFR, LTV, conforming loan, etc.) they can be utilized - saving the borrower quite a bit of time and money plus it eliminates the reps and warranties on the bank which are normally associated. Seems like a win/win.

However, I can't get past the appraisal regulatory requirements. I could see these used as valuations for loans under $250K but since it's good for all conforming loans that leaves a gap up to $453,100 loan amount where an appraisal would be required. It also could have some fair lending and/or UDAAP implications but I think we can mitigate those through documentation.

Anyone using these and how did you get comfortable with meeting appraisal rules in these cases? Investors may be OK with this, but I'm worried examiners would feel very differently! What am I missing?

Got a call back from my examiner on this... they haven't seen much (if any?) of these yet to really be able to comment, but did reiterate the regulatory requirements for an appraisal and appraisal notice so if there was a 'waiver' that would be very hard to comply with. It may be possible to consider them a 'valuation' if the information is available within CU so that's the route we will be testing for now.

Our loans are sold either to Freddie or the FHLB and we are relying on the following exemption in Appendix A.

9. Transactions Insured or Guaranteed by a U.S. Government Agency or U.S.
Government-sponsored Agency
This exemption applies to transactions that are wholly or partially insured or guaranteed by a U.S. government agency or U.S. government-sponsored agency. The Agencies expect these transactions to meet all the underwriting requirements of the federal insurer or guarantor, including its appraisal requirements, in order to receive the insurance or guarantee.