Inspection-based waivers now used by 25% of GSE sellers this year

Correspondent lenders in October 2023

For October 2023, GSE originations totaled $50.8BN, down 14.4% on the prior month. For property valuations, $43.5BN (85.8%) closed using appraisals and $6.36BN (12.52%) closed utilizing appraisal waivers. Lenders closed $879MM (1.73%) with inspection-based waivers, up 1.6% on September 2023. To put this into perspective, in a month where 15% less loans were delivered to the agencies and 10% less appraisal waivers were used, utilization of inspection-based waivers still grew by 2%.

Over 440 lenders have now directly delivered loans using the Freddie Mac ACE+ PDR and Fannie Mae VA+PD solutions; out of a total of 1,770 active GSE sellers in 2023. The number of lenders is actually higher due to correspondents also taking advantage of the solutions. Overall, inspection-based waivers now account for 13.7% by volume of all loans delivered using appraisal waivers – up from just under 2% at the beginning of the year.

Inspection-based waivers

The Freddie Mac ACE+ PDR (Automated Collateral Evaluation plus Property Data Report) solution now has 244 lenders delivering loans year-to-date, increasing 20% over last month, taking Freddie market share of inspection-based waivers over 50% for the first time since June 2023. Fannie Mae increased participation for the year to 357 lenders participating in Value Acceptance and Property Data (VA+PD), including 167 community banks and credit unions, and 185 non-banks.

Production channel

Retail channels accounted for 60.8% of inspection-based waivers, remaining steady at $534M. Mortgage brokers accounted for 25.7%, growing 6.3% to $226M, with correspondent sellers delivering 13.5% at $118.9M. UWM continued to deliver the most loans through both broker and correspondent channels.

Top lenders

Rocket posted another large month delivering nearly 40% of the inspection-based waiver total. Other large technology-enabled non-banks continued adoption of inspection-based waivers, notably including PennyMac and NewRez who grew 38% and 13% respectively.

More 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 and Fannie Mae 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:

In addition, you can access the Freddie Mac ACE+ PDR Solution page and the Fannie Mae Value Acceptance + Property Data FAQ.

See Q4 2023 mortgage originator volumes by property valuation type

MtgeFi identifies the originators using appraisals, inspection-based waivers and appraisal waivers