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This article quantifies the number of top mortgage correspondents using appraisal alternatives in 2023. We publish monthly updates on the actual use of inspection-based waivers by GSE issuers, but to-date had only provided estimates of the utilization by mortgage correspondents. The most recent article for GSE issuers is available Select lenders maximizing inspection-based waivers in March 2024.
By incorporating additional data sources to analyze the use of GSE appraisal alternatives, we found that more correspondent lenders (492) used inspection-based waivers than GSE issuers (474) in 2023. This represents 14.5% of the 3,395 GSE correspondents and 27.4% of the 1,730 GSE issuers. In comparison, the utilization of appraisal waivers by GSE correspondents and GSE issuers has reached 54.4% and 69.8% respectively.
We will provide quarterly updates for both the top mortgage correspondents (and their correspondent aggregators) for agency issuance using appraisal waivers.
Top mortgage correspondents definition
There are comprehensive explanations of correspondent lending available at Forbes.com, Rocket Mortgage and Bankrate.com so we will not repeat them here.
This article focuses on top mortgage correspondents that originate loans for sale to the GSEs, but are not themselves direct agency sellers. For clarity, we exclude lenders who are approved as a direct GSE seller but also act as a correspondent lender.
GSE issuers use of appraisal alternatives
This table shows the number of financial institutions that were GSE issuers in 2023 (‘All Loans’), and the percentage that take advantage of appraisal alternatives (‘All Waivers’), and specifically ‘Appraisal Waivers’ and ‘Inspection-Based Waivers’.
While the use of Appraisal Waivers has reached 70% across all lenders – with a high of 79% for independent mortgage banks – the use of inspection-based waivers is only at 27.4%. Adoption by independent mortgage banks is at 42%, more than double that of banks and credit unions.
This table shows the number and type of financial institutions that were GSE issuers delivering via the correspondent channel in 2023. The use of Appraisal Waivers and Inspection-Based Waivers drops to 50.4% and 18.2% respectively for the correspondent channel.
GSE correspondents use of appraisal alternatives
Last, this table show the number of top mortgage correspondents who sold loans for delivery to the GSEs in 2023. A total of 3,395 unique financial institutions acted as GSE correspondent lenders, comprising 1,100 banks, 471 credit unions and 1,824 non-banks.
The use of appraisal alternatives reached 54.4%, with 1,812 lenders (53.4%) using Appraisal Waivers and 492 lenders (14.5%) using Inspection-Based Waivers.
The use of Appraisal Waivers by non-banks is again higher at 57.2% when compared to banks (51.9%) and credit unions (45.2%). As before, non-banks use of inspection-based waivers is more than double that of banks and credit unions at 19.5%.
Identifying GSE correspondents & their aggregators
We are releasing new data products – available now – that identify the top mortgage correspondents and which GSE aggregators they sell to, including details:
- Top 25 GSE correspondent issuers – and all their correspondents, for Q4 2023:
- Agency – number of correspondent loans sold to Fannie Mae and Freddie Mac
- Property valuation – number of appraisals, waivers & inspection-based waivers
- Institution Type – bank, credit union and non-banks
- Unique ID & standardized institution name – for each lender that
Top Mortgage Correspondents with Property Valuations for Q4 2023
The product provides the top mortgage correspondent for Q4 2023 by institution type, total loan and property valuation counts. Additionally includes the top 25 correspondent aggregators for Q4 2023, showing all correspondents by institution type, total loan and property valuation counts. Property valuation shows the number of appraisals, appraisal waivers and inspection-based waivers.
$1,750.00
More information about inspection-based waivers
For lenders who wish to learn more, you can check out the the following articles. These include links to the Freddie Mac ACE+ PDR and Fannie Mae Valuation Acceptance and collateral valuation modernization strategies, new programs, selling guide updates, FAQs, process flow, job aids, approved technology and service providers, and information about the property data standards and user guides:
- Implementing the Freddie Mac Inspection-based Waivers – Quick Reference for Lenders
- Implementing the Fannie Mae Inspection-based Waivers – Quick Reference for Lenders
In addition, you can access the Freddie Mac ACE+ PDR Solution page and the Fannie Mae Value Acceptance + Property Data FAQ.