Have you Heard of Fannie Mae's CU (Collateral Underwriter) You Should!

Worried about your deals still falling apart due to Low Appraised Values, well hold onto your seats.....READ THIS WHOLE Post, then SHARE Everywhere. 

Big Changes in the Appraisal World coming by the end of January 2015 with Fannie Mae's Collateral Underwriter (CU). Right from the horses mouth.....Fannie is saying Appraisals WILL be flagged if they feel the property is over valued yet NO flag will generate if the property is thought to be UNDER Valued!! So guess what will happen?

Appraised values are going to be coming in low folks. Too many Appraisers are going to be very concerned about being Blacklisted by Fannie Mae and taken off their approved appraiser list. This is their livelihood and they cannot afford to be taken off of Fannie's Approved Appraiser List or they are OUT of  business.

Values will be coming in low.....UNLESS the Lender does not use CU (which is not required by Fannie in order to sell their loans to them) OR they use it but they determine which appraisals they are going to flag after they do their own HUMAN and not 100% automated review of the Report. If they let CU dictate the risk score of the Appraisal, there will not only be LONG delays in the process while the appraiser has to answer ALL the warnings generated in CU, but also the values will be lower and fewer loans will be approved.

Sorry for the bad news, but Fannie is gunning for Appraisers and they may shoot themselves in the foot by doing so... (with fewer loans going through due to appraisals,  far fewer loans can be  purchased for them to make money on) Appraisers are going to be safe rather than sorry and fly under the radar with low appraised values if they know they will not be Flagged for low appraised values.  PLUS...Lenders cannot pressure the Appraisers like they still do...because if the Appraiser has too many high risk Appraisals by Fannie Mae, they will be kicked off their list and that Lender cannot use them any longer! 

I would assume most lenders will not want CU (Collateral Underwriter) to kill their deals left and right, but it is up to them whether they plan to use CU in their day to day underwriting process. My guess is many Lenders WILL use CU to minimize their lending risks. Who Knows at some point Fannie Mae could require its use in order to buy loans....That would not surprise me in the least. 

You may want to ask the Lenders you work with if they plan to use CU and how much weight are they going to put into this automated review process over that of the Appraiser (BOOTS ON THE GROUND) and the Appraisal, because it could make a difference on how your deals work out or NOT.