In the last week, it appears that Fannie Mae is loosening the reigns and making mortgage qualifying easier. I won't try to completely explain Automated Underwriting here, but basically, when we as lenders take an application for a loan that will be sold to Fannie Mae or other investor, we gather all the details of the home purchase and all the buyers personal and financial information. We enter the information into our origination software and then send it off to Fannie Mae's Desktop Underwriter (DU) or other similar approval system. What we get back in seconds, is a list of what needs to be verified in our loan file for Fannie Mae to buy the loan.
When the mortgage fallout began, we in the Wenatchee mortgage business were quite frustrated because DU started asking for a lot more documentation than they used to. We were frustrated because our values remain high, but we were getting caught up in Fannie Mae's desire to improve the quality of loans they were buying. Some loans that would have been a slam-dunk Approve/Eligible in March were being declined in June. So we learned to adjust, as nobody has access to the mysterious inner-workings of DU; you just adjust to it's new personality and move on.
But in the last week, I have had three loans where DU waived the requirement for an appraisal!!, I haven't seen that in a long time. I would think this would be one of the last things they would let up on. Is this just happening for our area, or are they issuing Property Inspection Waivers (PIWs) all over the country? I'm not complaining; it speeds up the process and saves my clients money, so keep it coming. I'm just surprised by Fannie Mae's timing on this.
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