Fannie Mae is attempting to speed up the closing process by removing measures to ensure that properties have enough value to cover their loans… what could possibly go wrong?!

In markets where regularly see Original List to Sale Price ratios of 120%+, without an appraisal, its very possible that borrowers will be underwater once they close of there isn’t an independent, third party examining the property to determine market value. And if this is the case, who will the borrower come after when they find out 6 months later that they’re underwater?

Fannie Mae - has the backing of the government and enough money to pay for lawyers.

The bank - has no legal requirement other than the FNMA requirement.

Who is the only party in the transaction who is legally required to act and advise the best interest of the borrower? Who is the softest target to get the difference of sales price and market value from? The answer is the same: the buyer’s agent.

Appraisers nationwide realize that in years to come PIW will be a source of legal fallout, and are preparing to do retrospective valuations of properties for borrowers who were injured by the negligence of this FNMA policy. Don’t put yourself in a position that could cost you tens of thousands of dollars in years to come to speed up the closing by a few days now. ALWAYS advocate for client’s interest to know the market value of their home by an independent third party.