January 26, 2017
CA 2017-01 Fannie Mae Property Inspection Waiver (PIW) and Claim Handling
Arch MI’s1 PIW eligibility requirements align with Fannie Mae’s as detailed within the SEL 2016-08 and DU Release Notes dated October 24, 2016.
Arch MI will allow a PIW when offered by Desktop Underwriter® (DU®) and exercised by the lender according to Fannie Mae requirements. A full description of the requirements (as well as the ineligible items) is also found in the Fannie Mae Selling Guide as referenced below.
As with any other mortgage insurance submission, the lender is responsible for notifying the applicable Arch MI company of any changes pertaining to the loan—this includes situations that would render the Fannie Mae PIW offer invalid. This applies to all loans submitted for insurance, regardless of channel: delegated or full-file.
Arch MI’s Appraisal Requirements: A full Uniform Residential Appraisal Report (URAR) with interior and exterior inspections is required, unless:
- A PIW is offered by DU and exercised by the lender for a 1-unit primary residence or second home with a maximum 90% LTV.
- When a PIW is exercised by the lender, the property value entered in DU will be used. All Fannie Mae PIW requirements must be met.
- If an appraisal is obtained by the lender, the property value and all other information from the appraisal must be used, regardless of whether a PIW is offered and exercised.
If a PIW is validly obtained under the Fannie Mae Guide, section B4-1.4-10 (Property Inspection Waivers), Arch MI will not rescind a loan at claim solely for misrepresentation of value unless fraud/misrepresentations/inaccuracies were used to obtain the PIW or the PIW was not otherwise validly issued under the Fannie Mae Guide.
Lenders remain responsible for the accuracy of the information they provide to Arch MI relating to covered loans as set forth in Arch Mortgage Insurance Company’s Master Policy Section 3, Material Misrepresentation/Origination Errors/Material Value Variances and United Guaranty’s Master Policy Section 2.2, Representations of the Insured. Covered loans must still conform to the applicable underwriting guidelines, including, but not limited to, LTV limits, in order to qualify for coverage. Additionally, other policy exclusions, including, but not limited to, Physical Damage, Pre-Existing Environmental Impairment, and Incomplete Construction, may still apply when a claim is filed.
Accelerated Rescission Relief (SecureCert® and Master Policy Plus Endorsement)
A loan with a PIW is eligible for accelerated rescission relief. If accelerated rescission relief is granted on a loan with a PIW, then inaccuracies or misrepresentations in obtaining the PIW will not be grounds to rescind coverage.
This announcement is a summary and is not intended to capture all rights and responsibilities of the parties. Please refer to the applicable Master Policy for complete terms and conditions. If you have any questions, please contact your Arch MI Account Manager.
1 For purposes of this announcement, Arch MI includes Arch Mortgage Insurance Company, United Guaranty Residential Insurance Company, and United Guaranty Mortgage Indemnity Company.
© 2017 Arch Mortgage Insurance Company. “Arch MI” is a marketing term for Arch Mortgage Insurance Company and Arch Mortgage Guaranty Company. “United Guaranty” is a marketing term for United Guaranty Residential Insurance Company and United Guaranty Mortgage Indemnity Company (coverage from United Guaranty is available through admitted company only). SecureCert is a registered mark. Desktop Underwriter and DU are marks of Fannie Mae.