Select lenders maximizing inspection-based waivers in March 2024

For March 2024, GSE issuance totaled $46.1N, up 24.1% on February. For property valuations, $40.3BN (87.5%) closed using appraisals, up 24.0%, and $5.05BN (11.0%) closed utilizing appraisal waivers, up 28.6% on the prior month. Lenders closed $700MM (1.52%) with inspection-based waivers, up 6.2% on February 2024.

Overall, inspection-based waivers were 12.2% of the combined appraisal waiver (non-appraisal) solutions by loan balance. By number of loans delivered, inspection-based waivers were 15.0% of all waiver solutions, down slightly from February 2024.

Market share of inspection-based waivers in March

Fannie Mae Valuation Acceptance + Property Data market share of inspection-based waivers increased 8.5% to issuance of $299MM, on 8.7% higher volume over the prior month. The 376 lenders who have delivered loans through Fannie Mae Valuation Acceptance + Property Data include 199 independent mortgage companies and 108 banks and 69 credit unions, remained the same as the prior month.

Freddie Mac ACE+ PDR (Automated Collateral Evaluation plus Property Data Report) market share was 57.3% as utilization increased by 4.5% month-over-month to $401MM in issuance. Freddie Mac participation continues to grow with 334 lenders taking advantage of the solution, including 129 community banks, 27 credit unions, and 179 non-banks.

Broker and retail channels continue growth

Retail channel utilization of inspection-based waivers in March rose 7.9% to $432M and 61.7% of issuance. Mortgage brokers volume increased 12.0% to $169M and 24.2% of loan delivered. The correspondent channel was down 8.5% to $98M and 12.2% of overall volume.

Lenders that participated in the GSE pilots, before ACE+ PDR and VA + PD were formerly released to the selling guides, have significantly higher rates of adoption of inspection-based waivers in the broker channel, indicating they are being successful in educating mortgage brokers to take advantage of these solutions.

Maximizing inspection-based waivers in March

Rocket and UWM continue to increase their use of the inspection-based waiver solutions across retail, broker and correspondent channels, accounting for over 54% of total issuance in March.

Other lenders are optimizing their use of inspection-based waivers in March (alongside appraisal waivers) and taking advantage of these solutions at higher rates than their competitors to pass along these savings to their borrowers.

For cash-out refinance loans, 18 lenders had utilization exceeding 10%, and 4 were over 20%, including 2 banks and a credit union. The average utilization for cash-out refinance loans in March is 7.8% across all lenders. Excluding Rocket and UWM the rate drops to 3.6%. For reference the utilization of appraisal waivers for cash-out refinance loans is 14.8%.

For purchase loans, the average utilization of inspection-based waivers in March is 1.1% across all lenders, dropping to 0.71% when you exclude Rocket and UWM. Over 30 lenders had utilization exceeding 5%, with 4 lenders over 10%, again including a bank and credit union.

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