The spread of ‘Corona Virus Disease 2019’ (COVID-19) has sent shockwaves through the nation’s economy. Social/Physical distancing has made retail challenging, to say the least, and governments are implementing their own policies to lock down, or shelter in place, with varying levels of intensity.
Taking this thinking to the real estate market leads to some logical questions, such as, “what about appraisals? How can an appraisal be done with social distancing?” and “But.. how can I sign documents if I can’t leave my house?”
Thankfully, measures have been taken to help account for challenges such as these. Yesterday, we published a video highlighting our Hybrid E-Closing option, in which we mentioned the participation of mobile notaries to help buyers wet-sign (sign in person with ink) without leaving home.
New regulatory relaxations were announced yesterday to make home buying possible during this challenging time. These new changes were implemented to account for appraisal difficulties in keeping social distances, as well as other challenges.
A brief summary of modifications
The following summaries are taken directly from Fannie Mae’s letters, which are made available at the bottom of this post.
- Temporary appraisal requirement flexibilities: allowing exterior-only inspection appraisals or desktop appraisals
- Desktop appraisals: allowing for purchase transactions when an interior and exterior appraisal is not available
- Exterior-only inspection appraisals: allowing for purchase and refinances of Fannie Mae-owned loans
- Revisions to the scope of work, statements of assumptions and limited conditions, and appraiser’s certifications: requiring modified language to be used with exterior-only and desktop appraisals
- Additional form instructions for appraisals: requiring identification of “exterior” or “desktop” on the interior and exterior reports
- Appraisal waivers: encouraging the acceptance of waiver offers when eligible
- Completion reports (Form 1004D): allowing alternatives when a Form 1004D cannot be obtained
- Verbal verification of employment: Offering flexibilities related to obtaining the verbal verification of employment.
- Submission of financial statements and reports: Extending the deadline for submission of financial statements and Form 582 to Apr. 30, 2020.
Effective: These temporary flexibilities are effective immediately for all loans in process and remain in place for loans with application dates on or before May 17, 2020.
- Download the entire Appraisal letter along with Appraisal guidelines from Fannie Mae here: https://www.dropbox.com/s/ogpmy11sm7o9wdy/COVID-19-Appraisal-LL-2020-04-032320-Final-1.pdf?dl=1
- Download the entire Origination letter along with Origination guidelines from Fannie Mae here:
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