I am not doing the 3.6 FORM deal

[alebrewer]

Fannie Mae offers R&W on Value Acceptance loans.

Yep, but as I understand it - only on value. The lender is still responsible for the accuracy and completeness of the property data. I defer to the experts for confirmation of that.

 

[J Grant]

VA, at least in this context, is an acronym for 'Value Acceptance'. Here's your answer: when VA is offered and used, the GSE's DO provide R&W relief on the VALUE of the property. The lender is still (as they are when VA isn't offered) responsible for the accuracy and completeness of the property data.

Here's an example that might help: Lender uses the SP as the 'estimated value' and inputs that # into AUS. AUS kicks out the option for VA + PDC. Lender reviews the PDC and notices several latent defects in the property, but does nothing to verify whether they are addressed/remedied. The lender wouldn't be responsible for the 'value' that was input (as they have R&W relief for the value component), but would still be responsible for misleading property condition information (i.e. they didn't address property condition issues). That make sense?

I thought you meant VA for the Veterans loans


PROVE it, show a citation, as you love to demand - show me evidence that the GSE's provide R & W relief for the VALUe of the property. That would mean they would repurchase for collateral valuation issues. Can you provide proof that the GEEs's do that?

 

[shrubberyvaluation]

An appraisal is an opinion. A price is a statement of fact. I'll take the merits of a price over the merits of an opinion every single time. Although I'm not surprised you think an appraisal is a more accurate rendering of a property's value than an actual price.

It is tough. If I buy a property from my brother, you have a price, its a fact, but it doesn't make it a better indicator of market value than an opinion of market value appraisal. There is also times where fraud is involved that the price is not really an indicator of market value, or other factors that come into play not pertaining to market value that can impact the price. The buyers sometimes are not educated either, for example they didn't understand the actual vacant lot they were buying is landlocked and not where they thought it was or something.

 

[J Grant]

Fannie Mae offers R&W on Value Acceptance loans.

What does that mean- does it mean that Fannie Mae will re-purchase (buy back ) the loan for a faulty value issue with a Value Acceptance?

 

[J Grant]

AI Overview



Yes, Fannie Mae offers
Representations and Warranties (R&W) relief on property value for loans that receive Value Acceptance or Value Acceptance + Property Data offers from Desktop Underwriter® (DU®). This means that for eligible loans where an appraisal waiver is exercised, Fannie Mae accepts the lender-submitted property value and waives certain underwriting R&Ws related to that value.

So what, exactly, is Fannie offering other than that it waives UW for R and W and accepts the elder submitted value?

 

[alebrewer]

I thought you meant VA for the Veterans loans


PROVE it, show a citation, as you love to demand - show me evidence that the GSE's provide R & W relief for the VALUe of the property. That would mean they would repurchase for collateral valuation issues. Can you provide proof that the GEEs's do that?

You mean like this?

 

[J Grant]

AI
Yes, Fannie Mae offers "representations and warranties" (R&W) relief on property value when a loan is eligible for and uses its "Value Acceptance" program, which waives the need for a traditional appraisal. When a lender exercises Value Acceptance or Value Acceptance + Property Data, Fannie Mae accepts the lender-submitted property value estimate, and the lender receives a limited waiver of R&Ws related to that value.

How it works

• Value Acceptance: Fannie Mae provides an appraisal waiver through its Desktop Underwriter® (DU®) system for certain transactions. The lender submits the loan casefile to DU, and if the loan is eligible, DU issues a Value Acceptance offer.
• Representations and Warranties (R&W) Relief: When a lender exercises the Value Acceptance offer, Fannie Mae accepts the lender's estimate of value and waives certain R&Ws related to that value.
  • Value Acceptance + Property Data: This is an extension of the program that is being used more frequently. It requires a property data collection (an interior and exterior inspection) instead of a traditional appraisal. The data is submitted to Fannie Mae, and the loan is eligible for R&W relief on property value based on this data, without a full appraisal.

My comment : I am not seeing anything about Fannie assuming liability for the value in the form of buyback or repurchase by Fannie. All it see is a repeat - they waive UW and R and W on these loans.

 

[alebrewer]

It is tough. If I buy a property from my brother, you have a price, its a fact, but it doesn't make it a better indicator of market value than an opinion of market value appraisal. There is also times where fraud is involved that the price is not really an indicator of market value, or other factors that come into play not pertaining to market value that can impact the price. The buyers sometimes are not educated either, for example they didn't understand the actual vacant lot they were buying is landlocked and not where they thought it was or something.

Fair enough. If we're using hyperbole to demonstrate our position(s) though, do we want to introduce the fact that it is VERY common, when procuring two appraisals, for those two values to be markedly diverse? To the tune of 15-20%? What about the fact that folks still use $20/foot for GLA adjustments and $10k for pool adjustments? What about the fact that folks use the 'market trend' tools without having a clue what they're doing? I mean - we could go on ad nauseum... if we're using hyperbole to defend our positions...

 

[alebrewer]

AI
Yes, Fannie Mae offers "representations and warranties" (R&W) relief on property value when a loan is eligible for and uses its "Value Acceptance" program, which waives the need for a traditional appraisal. When a lender exercises Value Acceptance or Value Acceptance + Property Data, Fannie Mae accepts the lender-submitted property value estimate, and the lender receives a limited waiver of R&Ws related to that value.

How it works

• Value Acceptance: Fannie Mae provides an appraisal waiver through its Desktop Underwriter® (DU®) system for certain transactions. The lender submits the loan casefile to DU, and if the loan is eligible, DU issues a Value Acceptance offer.
• Representations and Warranties (R&W) Relief:When a lender exercises the Value Acceptance offer, Fannie Mae accepts the lender's estimate of value and waives certain R&Ws related to that value.
  • Value Acceptance + Property Data: This is an extension of the program that is being used more frequently. It requires a property data collection (an interior and exterior inspection) instead of a traditional appraisal. The data is submitted to Fannie Mae, and the loan is eligible for R&W relief on property value based on this data, without a full appraisal.

My comment : I am not seeing anything about Fannie assuming liability for the value in the form of buyback or repurchase by Fannie. All it see is a repeat - they waive UW and R and W on these loans.

Read justinjla's post, J. He works for Fannie...

 

[J Grant]

You mean like this?

View attachment 104957

I asked him to explain what that means in terms of liabiity /buy back of a loan by fannie for valuaiton issues ith the VA program. See my posts in response to it. If he stated that fannie does a repurchase / buyback on a loan with valuation issues in the value acceptance program that would be a yes - if not, then no.