Fannie Mae said new updates to its Collateral Underwriter® (CU) and Desktop Underwriter® (DU) should increase the speed and efficiency of lending and give lenders freedom from representations and warranties on property values for many loans.

The changes are part of Fannie Mae's Day 1 CertaintyTM initiative. With a qualifying risk score from CU and a recommendation of Approve/Eligible from DU, appraised value can be accepted up front.  Also, working with CU, DU will now issue property inspection waivers (PIWs) - an offer to waive the appraisal if other requirements are met. With an exercised PIW offer, lenders receive representation and warranty relief on property value, condition, and marketability.  The company said greater certainty and efficiency in the appraisal process will mean potential time and cost savings in loan originations.

"With the power of Collateral Underwriter, relief from representations and warranties for appraised property value on many loans now makes the process more efficient for everyone by reducing the need for follow-up with appraisers," said Carlos Perez, senior vice president and chief credit officer for single-family at Fannie Mae. "And with the enhanced property inspection waiver, many refinance transactions will not require a new appraisal, potentially shortening the origination process and giving borrowers a significant cost savings."