UAD 3.6

[Joe Flacco]

As a mortgage insurer, we speak to the GSE's regularly about appraisal waivers and other topics, and from those conversations, I don't believe that there are any plans to expand appraisal waivers to anywhere near 50%. There may be an expansion of appraisal waivers down the road, but it won't be anywhere approaching 50% anytime in the near future.

The Fannie Mae guy that was here pumping hybrids before said that they would increase usage whenever fees push up or turn times get extended.

It sounded to me like the waivers would be used as a relief valve to keep appraisal fees where they are at.

 

[timd354]

Appraisal waivers make up approximately 49% of all valuations for GSE mortgage transactions. Working RE 2021

Approximately 28% of all GSE (Fannie Mae and Freddie Mac) mortgage transactions utilize an appraisal waiver or property data alternative (2025)

The share of appraisal waivers for both GSEs combined for June 2025 stood at 16%, down 1 ppt. from last month and down 33 ppts. from the series’ peak in March 2021. - Due to the pandemic.

Thats a lot of appraisal work that is not being done by us appraisers. There will always be some sort of alternative valuation, this is approaching irresponsibility.

https://www.jstor.org/stable/resrep71844?seq=1

Per the data you provided, 84% of GSE valuations utilize an appraiser with 72% of valuations being a traditional appraisal and 12% being a hybrid appraisal....that aligns pretty closely with numbers I have been seeing.

I know that it stinks for appraisers who naturally want to keep ahold of as much business as possible, but, thus far, I have not seen any indication that loans with appraisal waivers or hybrid appraisals default at a higher rate than loans with traditional appraisals or that severity is any worse for defaulted loans with appraisal waivers or hybrids than for defaulted loans with traditional appraisals, thus there is no evidence that the use of waivers or hybrids have materially increased risk. As a mortgage insurer who is in first loss position on the loans and pools of loans that we insure, we constantly analyze everything that affects mortgage risk, so we would know if the use of waivers and hybrids was increasing risk.

There may come a point where the GSE's try to expand the use of waivers to an irresponsible level, and if that happens we will push back on them hard and could even decide to stop insuring some or all loans with an appraisal waiver (or increasing the premium on such loans), but we have not reached that point yet.

 

[Joe Flacco]

https://www.aei.org/wp-content/uploads/2026/05/GSE-Appraisal-Waiver-Infographic-March-2026-FINAL-3.pdf?x97961

They are at 28% of originations as of March 2026.

 

[chad hampton]

I’m only interested in the % where they order real appraisals.

Hybrid garbage count the same as waivers in my book. Very few independent fee appraisers participate in hybrids.

 

[timd354]

Per the data you provided, 84% of GSE valuations utilize an appraiser with 72% of valuations being a traditional appraisal and 12% being a hybrid appraisal....that aligns pretty closely with numbers I have been seeing.

View attachment 109601

https://www.aei.org/wp-content/uploads/2026/05/GSE-Appraisal-Waiver-Infographic-March-2026-FINAL-3.pdf?x97961

They are at 28% of originations as of March 2026.

The reason for the most recent increase in appraisal waivers (as shown in the March-2026) data is that there was an increase in the refinance originations in 4q25/1/q26 and waivers are much more prevalent on no cash-out refis than any other loan purpose as is shown in the bottom table. The percentage of purchase loans with refinances has been relatively flat since 2021, with only a marginal increase from 2021 to Mrach-2026.

 

[Non Sequitur]

I’m only interested in the % where they order real appraisals.

Hybrid garbage count the same as waivers in my book. Very few independent fee appraisers participate in hybrids.

True. During an sales pitch/interview by a national staff firm, they take EVERY hybrid offered.

 

[DWiley]

The reason for the most recent increase in appraisal waivers (as shown in the March-2026) data is that there was an increase in the refinance originations in 4q25/1/q26 and waivers are much more prevalent on no cash-out refis than any other loan purpose as is shown in the bottom table. The percentage of purchase loans with refinances has been relatively flat since 2021, with only a marginal increase from 2021 to Mrach-2026.

The market mix has certainly changed from last year.
Mar and April a year ago about 20% to 25% of mortgage loans were refis. For those same months this year, it was 40% to 45% refis.

 

[chad hampton]

True. During an sales pitch/interview by a national staff firm, they take EVERY hybrid offered.

Yeah, most of those appraisal mills (and now AMC turned appraisal firms), their appraisers are hired to only do hybrids.

That’s why they had to bend the rules to become appraisal firms, they couldn’t work under the defined laws and rules to find appraisers to do them. So instead of letting the market work, they get to break rules.

 

[Joe Flacco]

The reason for the most recent increase in appraisal waivers (as shown in the March-2026) data is that there was an increase in the refinance originations in 4q25/1/q26 and waivers are much more prevalent on no cash-out refis than any other loan purpose as is shown in the bottom table. The percentage of purchase loans with refinances has been relatively flat since 2021, with only a marginal increase from 2021 to Mrach-2026.

You are reading the data wrong.

Yes, usage on purchase originations has been pretty flat but ticking higher since 2021.

Both RT refinance and CO refinance show the same trend. Peaked in 2020-2021, bottomed in 2022-2023, and have since increased about half way back to peak usage levels in 2020-2021, and is still increasing.

 

[timd354]

You are reading the data wrong.

Yes, usage on purchase originations has been pretty flat but ticking higher since 2021.

Both RT refinance and CO refinance show the same trend. Peaked in 2020-2021, bottomed in 2022-2023, and have since increased about half way to peak usage levels in 2020-2021.

You have no idea what you are talking about.

The charts that you posted do not show loan volume and the loan volume of refinances has sharply increased during 4q25 and 1q26......Thus, since waivers are much more prevalent on refinances than purchases, when refinance volume increases relative to purchase volume, the overall percentage of GSE loans with waivers naturally increases, which is exactly what has happened recently. This ain't rocket science, but apparently is above ability of some people to understand.

Alternatively, maybe this is all just a big conspiracy designed for no other purpose than screwing you and other appraisers.