Gotham’s good guy District Attorney Harvey Dent turned into Batman’s evil nemesis Two-Face in DC comics. Your fate in an encounter with Two-Face often hinged on a flip of a two-headed coin. Sometimes homeowners face their own Two-face, in the form of an appraiser, whose valuation report decides whether your buyer is going to get a loan or not. But now Freddie Mac may swoop in with ACE to replace the appraisal and save the deal.
Every borrower looking to buy a home has an appraisal done by the bank to asses the worth of the purchase. If the appraisal is at or above the purchase price, the lender can certify the loan. If the appraisal falls below the purchase price, the bank may lend less than expected. They provide a valuable service to the buyer, and the bank, and protect against overpaying. Appraisers aren’t the bad guy. But appraisals may come in lower than the purchase price for various reasons, which jeopardizes deals. Some deals live, some die.
Freddie Mac has launched an “automated collateral evaluation” ACE which assesses the need for a traditional appraisal and replace it with automated appraisal from the multiple listing services and public records. To find out if a property is eligible for ACE, lenders must submit loan data through Freddie Mac’s Loan Product Advisor®, the cornerstone of Loan Advisor Suite®. Instead of an appraiser from “who knows where” with “who knows what” data, ACE promises to give local reliable data.
Fannie Mae will allow lenders to receive a Property Inspection Waiver (PIW) on certain one-unit principal residence and second home purchase transactions with loan to value ratios up to 80%. Will ACE save your deal or be the new Two-Face? Hard to tell yet, but realtors are optimistic that this new service will give accurate data to keep the market going strong. If you need more info… AskHollingsworth.
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