Appraisal Requirement for ALL Conventional REO Loans
Based upon the potential risk associated with the physical condition of REO properties, Effective with new underwriting submissions, Guaranteed Rate is establishing a policy requiring a full Uniform Residential Appraisal Report (URAR) for all conventional on REO properties. REO properties are defined as properties that are managed by, or are in the possession of, a lender as a result of foreclosure or forfeiture (deed-in-lieu of foreclosure), due to default by the borrowers. The Purchase Agreement, Title, and other mortgage documents will indicate the subject property as being REO.
These properties may pose additional collateral risk because they are uninhabited and may be subject to:
- Theft of items affecting livability (i.e. water heater, furnace, wiring, etc.)
- Lack of on-going maintenance
- Other factors
REO Required Appraisal
REO properties require an interior inspection to identify and minimize collateral risk. Therefore, a full URAR (appraisal) must be obtained on these properties. The appraiser must address any adverse items found that could affect the livability or marketability of an REO property. The level of appraisal recommended by AUS represents the minimum collateral documentation requirement for the property. Regardless of the level of appraisal documentation specified by AUS, a full URAR for all REO properties is required.
Please feel free to contact your VP of Wholesale Lending or the Commitment Desk for further clarification if needed.
Thank you for your continued business!!