Beginning on April 15th, the new Fannie Mae property valuation initiative launched throughout the United States. Essentially, this revolutionary system encompasses technology, data, and analytics. As a result, it enhances the lending process for every stakeholder, including lenders, Realtors, title agencies, attorneys, homeowners, and homebuyers.
Overall, Fannie Mae’s goal is to improve the efficiency and accuracy of the mortgage loan process. Back on March 1st, 2023, Fannie Mae formally announced the changes via their Selling Guide Announcement. The newly introduced options provide a range of new ways to establish a property’s market value, with unique options available depending on the risk.
Detailing the Fannie Mae Property Valuation Initiative
First, the Fannie Mae property valuation initiative introduces the terms, “value acceptance” and “appraisal waiver”. These will better reflect the actual lending process by blending data with the lender-provided value. With the new home valuation system, a third party collects data on both the property’s interior and exterior.
Next, the lender reviews the data to confirm the property’s mortgage eligibility. In addition, the lender also determines whether the property requires a further appraisal. To ensure data validity, third-party data collectors experience a detail vetting process, complete with annual background checks and professional training. In the event of a further property valuation, the system involves hybrid appraisals. Basically, these appraisals incorporate previously collected home data.
What Does This Mean for Homeowners?
The Fannie Mae property valuation system helps homeowners to save time and money on the appraisal process. According to Fannie Mae, the hybrid approach to appraisals (where data collectors are used alongside appraisers) shaved around 5 days off the process. Notably, this also lowers the cost of appraisals through process automation. According to Fannie Mae, mortgage borrowers saved $2 billion over the last two years.
For what is traditionally a very time-consuming and costly aspect of home loan borrowing, Fannie Mae’s automated and updated solution hopes to smooth wrinkles and improve upon a system that hopefully benefits all parties involved. To learn more about the Fannie Mae initiative, contact the title and escrow specialists at Plymouth Title Guaranty Corporation.