Beyond rates, speed, agility and a positive customer experience are the overriding decision-making factors for borrowers seeking lenders for a home purchase or refinance. Speed is particularly essential to gaining loyal customers, especially in today’s seller-driven market. The lack of inventory has only fueled competition amongst buyers, thus placing even greater importance on pre-approvals and speed to close. On the refinance and home equity side, delivering on speed is a key way lenders can differentiate themselves in a highly competitive industry. In fact, according to the ServiceLink State of Homebuying Report, speed was among the top three most critical factors in the refinance process.
The History of Property Inspection Waivers
To meet the needs of a changing industry and evolving borrower preferences, Fannie Mae and Freddie Mac introduced property inspection waivers in 2017. These updates granted lenders permission to waive in-person appraiser visits on certain qualifying mortgages. The aim was to respond to market changes and increase time and cost-efficiencies on lower loan-to-value (LTV) ratio loans. When waivers are issued, the submitted value is based on an automated underwriting system, rather than an appraiser’s feedback. Read more about Fannie Mae’s property inspection waiver requirements.
How Property Inspection Waivers Impact Origination Speed
What do appraisal waivers mean for the speed of the loan process? Especially in high-volume markets like the industry has recently experienced, a PIW can fast-track loan origination by eliminating the need for an in-person appraisal. To extend their benefits, lenders can combine waivers with automation in additional key milestones – flood, title and closing – and further accelerate their cycle times.
Where Property Inspection Waivers Fit into the Origination Process
Lenders can kickstart an accelerated open-to-close timeline when they receive a PIW on a file. When combined with additional solutions, a waiver can fast-track the origination process and deliver early visibility into a closing timeline – allowing them to prioritize effectively. ServiceLink assists our clients in implementation of this streamlined process. “We refer to it as creating an ‘express path,’” says Antonio Little, National Sales Executive, Originations for ServiceLink. According to Little, in many cases, lenders can combine a PIW with an instant title decision, for a fast-tracked route to the closing table.
Instant title decisioning, which ServiceLink offers on all title orders via our EXOS® Title solution, allows lenders to segment their volume into distinct buckets, based on title complexity. A majority of loan files qualify for instant title, which means the lender receives the title commitment immediately. Combining ServiceLink’s instant title with a PIW creates an express path for files. When a loan is eligible for a PIW and instant title, lenders know they may get to closing faster. Lenders can prioritize these files, knowing they may be able to close on them as soon as possible. They can also share the good news with their borrower, which helps them have a less stressful mortgage experience.
ServiceLink offers additional services that allow lenders to take the express path to the closing table:
- Flood QuickCheck: With ServiceLink Flood’s QuickCheck, know the flood insurance requirements early in the loan process to start the conversation with your borrower about potential flood insurance needs.
- Instant Closing Scheduling: EXOS® Close allows for instant consumer or lender scheduling of the closing appointment, based on real time signing agent availability. It allows lenders and borrowers to avoid friction associated with scheduling.
- No-Touch Closing Disclosure: ServiceLink’s EXOS® Closing Disclosure facilitates no-touch closing disclosure generation for faster origination. It instantly extracts data through seamless no-touch data – for improved efficiency, accuracy and flexibility.
- Remote Closing: Remote closing can further accelerate the origination process. Where permitted by regulations, remote online notarization allows borrowers to bypass the complications of an in-person closing and instead close from the comfort of their home.
This holistic approach to utilizing property inspection waivers may allow lenders to extend their benefits: speed and transparency. For lenders, this means they may save time – and costs – and their loan officers will be more efficient. For borrowers, this means they’ll have earlier visibility into the length of their closing process and a better mortgage experience. ServiceLink is prepared to partner with lenders to ensure they realize these benefits in full.
“We’ve invested in the technology to accelerate the critical parts of the loan process for years. This includes our often-discussed instant title solution, but that’s just one step,” says Phillip King, Vice President, Principal Product Manager. “When they’re granted a PIW, lenders can take advantage of all our instant products – like EXOS Title, EXOS Close, EXOS Closing Disclosure and Flood QuickCheck – in the same day. This approach virtually eliminates friction in the origination process.”
When a Loan Doesn’t Qualify for a Property Inspection Waiver
If a loan doesn’t qualify for a PIW, lenders can still take advantage of leading-edge technology for faster origination and increased transparency. ServiceLink offers instant, digital appraisal scheduling through our EXOS® Valuations solution. With EXOS® Valuations, borrowers can instantly schedule their ServiceLink appraisal for the exact date and time of their choice – and instantly receive the name, photo and contact information of their local appraiser. This process eliminates time delays associated with appraisal scheduling and appointment confirmation.
What’s Next for Property Inspection Waivers
The value of PIWs was emphasized during the pandemic, as access to homes became limited for health safety reasons and as refinance volume skyrocketed. “The pandemic helped us to showcase the work we’ve been doing to digitize the mortgage experience,” says King. “Lenders stepped back to explore the technology and how it could solve their immediate issues with pipeline management and the need to keep borrowers and vendors safe.”
“As I consult with lenders and assess their volumes and needs, I help them to define their digital strategy,” says Little. “What is their plan to stay competitive in a market where borrowers are demanding speed, convenience and an amazing experience? ServiceLink’s products including Flood QuickCheck, instant title and closing scheduling meet that demand and allow lenders to focus on selling loans without getting bottlenecked in the process. PIWs simply allow us to help our lenders deliver an even faster and better experience to borrowers.”
As the government-sponsored enterprises look for further opportunities to modernize the origination process – focusing particularly on valuation – ServiceLink stands ready to help its clients make the most of regulatory changes.
Learn more about appraisal modernization.