Freddie Mac Expands Automated Collateral Evaluation (ACE) Eligibility to Include Purchase Transactions

Freddie Mac expanded the automated collateral evaluation (AC) eligibility to include purchase transactions. In Bulletin 2017-8, Freddie Mac introduced ACE provide sellers the option to waive appraisal requirements for certain Loan Product Advisor mortgages. The ACE option originally applied only to “no cash-out” refinance transactions. Freddie Mac is expanding the eligibility for the ACE option to include purchase transactions. In addition, Freddie Mac updated the list of mortgages that are ineligible for an ACE appraisal waiver to include: non-arm’s length transactions; purchases of REO properties; Texas Equity Section 50(a)(6) mortgages; and mortgages with an estimate of value or purchase price greater than $1,000,000. In addition, Freddie Mac prohibits sellers from accepting the appraisal waiver offer if the seller is aware of adverse physical property conditions identified in the sales contract, property inspection or disclosure from the borrower that warrant an appraisal being obtained. The Bulletin becomes effective September 1, 2017.

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