Daily Archives: September 25, 2017
ACTION ALERT: Call Congress About Fannie/Freddie’s Risky Appraisal Waiver Program
Freddie Mac & Fannie Mae have embarked on programs that waive appraisal requirements in first purchase and refinance transactions, using propriety models and generally unreliable data from MLSs and public records for collateral risk decision making.
According to Fannie & Freddie, this is being done to lower costs and shorten closing time for consumers. While Fannie Mae has indicated the appraisal waivers will represent only 5 percent of their loan portfolio, Freddie Mac has thus far being unwilling to provide estimates, indicating that as much as one-third of their portfolio may be offered appraisal waivers.
These programs will create unnecessary and unacceptable risks for taxpayers and homeowners, and they come at a time when markets are at all-times – when risk mitigation should be tantamount.
Congress is once again turning housing finance reform, and as they deliberate, they should hear from appraisers on why appraisal waivers are a bad idea and a risk to taxpayers.
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