Conventional Appraisal Valuation

(Standard Agency – Fannie Mae & Freddie Mac)

Topic

Previous Requirements

New Requirements

Submission Summary Report

All appraisals must include a successful Submission Summary Report (SSR).

·    Note: The Fannie Mae Collateral Underwriter (CU) score is required on Fannie Mae standard products and Freddie Mac Loan Collateral Advisor (LCA) is required on Freddie Mac standard products.

·    For loans with a Property Inspection Waiver (PIW), no additional valuation is required.

·    For loans with an appraisal and a PIW noted on the AUS, no additional valuation is required.

·    For loans with an appraisal and a PIW is NOT noted on the AUS:

§  If the Collateral Underwriter (SSR) score is < 2.5, Appraised Value may be used.

§  If the Collateral Underwriter (SSR) score is > 2.5 to </= 3.5 OR no score is returned, the appraisal is subject to the AVM/CDA/BPO.

§  If the Collateral Underwriter (SSR) score is > 3.5, Arc Home will review the appraisal for acceptance. At the discretion of Arc Home, the appraisal may be subject to additional conditions and/or review requirements (supporting value). Documentation to support value may include, but is not limited to, a field review and/or additional appraisal.

All appraisals must include a successful Submission Summary Report (SSR).

·    Note: The Fannie Mae Collateral Underwriter (CU) score is required on Fannie Mae standard products and Freddie Mac Loan Collateral Advisor (LCA) is required on Freddie Mac standard products.

·    For loans with a Property Inspection Waiver (PIW), no additional valuation is required.

·    For loans with an appraisal and a PIW noted on the AUS, no additional valuation is required.

·    For loans with an appraisal and a PIW is NOT noted on the AUS:

§  If the Collateral Underwriter (SSR) score is < 3.5, Appraised Value may be used.

§  If the Collateral Underwriter (SSR) score is > 3.5 OR no score, an Arc Home Loan Collateral review is required. At the discretion of Arc Home, the appraisal may be subject to additional conditions and/or an additional valuation may be required to support the value.

Additional Appraisal Review Requirements

The Automated Valuation Model (AVM) must have a confidence score of 90% or higher (or “H” in the case of the HVE model) AND be at least 90% of the appraised value.

If the AVM is < 90%, then a BPO or CDA from Clear Capital must return a value at least 90% of the appraised value.

·    If the BPO or CDA return a value < 90% but >/= 80% of the appraised value, a field review and/or additional appraisal is required to support the subject property value.

·    If the BPO or CDA return a value of “Indeterminate”, a new appraisal is required to support the subject property value.

An AVM/CDA/BPO is no longer applicable unless requested by Arc Home.

Appraisal Transfer Letter

Fannie and Freddie Conventional loans: Appraisal must be accompanied by an Appraisal Transfer Letter releasing the appraisal to Arc Home.

·    The letter must be on the transferring Lender’s letterhead with current date, borrower’s name, and property address.

·    The letter must be signed by an officer or manager of the transferring Lender that is not in Origination or Production.

·    Transferring Lender must certify and warrant that they have adopted and complied with the Interagency Appraisal and Evaluation Guidelines which address the Appraisal Independence requirements under the Dodd-Frank Wall Street Reform and Consumer Protection Act of 2010, Truth In Lending regulations and all applicable laws and the appraisal was ordered and prepared in compliance with those requirements.

·    The letter must confirm that that the transferred appraisal is the only appraisal order on this property by the lender.

Fannie and Freddie Conventional loans: Appraisal Transfer Letter is no longer required.

(This policy change does NOT affect the following products: Arc Access, Arc Elite, Conventional Investment Property and FNMA/FHLMC Second Home & Investment Property)

Verbal Verification of Employment (VVOE)

(Conventional, Government, Conventional Investment Property,

FNMA/FHLMC Second Home & Investment Property, Arc Access, Arc Elite)

Topic

Previous Requirements

New Requirements

VVOE Requirements

Verbal Verification of Employment is required for all borrowers using salaried income to qualify and must be completed within 3 business days prior to the Note Date.

Verbal Verification of Employment is required for all borrowers using self-employed income to qualify and must be completed within 20 business days prior to the Note Date. 

Verbal Verification of Employment is required for all borrowers using salaried income to qualify and must be completed within 10 business days (FHA requires 10 calendar days) prior to the Note Date.

Verbal Verification of Employment is required for all borrowers using self-employed income to qualify and must be completed within 20 business days (USDA requires 30 calendar days) prior to the Note Date.