Well, sort of… This past week Fannie Mae issued a nine page ‘clarification’ letter. This is probably as close as Fannie comes to admitting they mishandled their rollout of CU to the lender community. They backtrack from an initial stance that CU was ‘nothing to worry about’ and are now admitting that it is a ‘significant body of change’:
You can find the letter here: https://www.fanniemae.com/content/announcement/ll1502.pdf
They confess that they now realize the industry has been in an uproar since CU was introduced:
There are two items that stand out to me; the first is that Fannie is reminding lenders that CU is voluntary:
The second is that lenders are now strictly prohibited from passing along CU findings. A human review process is required:
So what does this mean if I am a concerned Realtor or homeowner?
In my opinion this combination of statements by Fannie will effectively shut down CU while the lenders rethink their strategy. As noted in my prior post (http://turnersappraisals.com/cu-we-are-fannie-mae-and-we-are-here-to-help/) many lenders were caught off guard and had no process in place. They were simply passing along the CU flags, creating unnecessary delays and possibly killing deals. Now they must staff up or provide training and put a process in place. This will take time and money. Since CU is voluntary they will most likely curtail wholesale misuse. This has already happened at one AMC/Lender I work with. They sent me an automated clarification ‘copy-and-paste’ CU request then immediately canceled the request and approved the appraisal. Here’s hoping the majority follow suit.
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