PennyMac considers a Disaster any event that causes substantial damage. Disasters include but are not limited to:
- Hurricanes/Tropical Storms
- Volcanic eruptions
- Nuclear accidents
- Terrorist attacks
It is the Seller’s sole responsibility to be aware of and act upon any mortgage loans impacted by disasters prior to the sale to PennyMac.
The Seller should contact the appropriate source e.g., state office, regional Federal Emergency Management Agency (FEMA) offices, news agency, etc. to determine whether properties located in its origination regions are included in the disaster areas.
PennyMac’s Disaster Policy applies to any of the following:
- FEMA declared disaster areas eligible for Individual Assistance.
- Areas identified by PennyMac.
- Properties that the Seller has reason to believe sustained damage in a disaster.
Appraisals completed on or before the incident period end date
Prior to purchase, PennyMac will require a post disaster inspection confirming the property has not been adversely affected by the disaster. The Lender can utilize any of the following re-inspection options:
- Property Inspection Report (Form 2075).
- Appraisal Update and/or Completion Report (Form 1004D)
- Certification from a Licensed Property Inspector
- Post-disaster inspection from an established and reputable service provider, with post-disaster photos that clearly demonstrate the property has not been adversely affected by the disaster.
- Lender Certification with post-disaster photos that clearly demonstrate the property has not been adversely affected by the disaster. The Certification must not be executed by an employee that receives direct compensation from the subject transaction.
- NOTE: Disaster inspections may not be completed by the Lender on non-delegated transactions (see non-delegated overlay matrix).
Appraisals completed after the incident period end date
For a period of 90 days from the incident period end date, full appraisals are required on impacted properties. In the report, the appraiser must confirm the property has not been adversely affected by the disaster.
Loans without an Appraisal
PennyMac will consider the note date as the appraisal date. Sellers must apply the disaster policy above based on the note date when the loan does not have an appraisal. This includes conventional loans with an appraisal waiver, FHA Streamline, VA IRRRL, and USDA Streamlined-Assist programs.
Conventional Loans with Appraisal Waivers
In order for the Seller to confirm properties have not been damaged by a disaster, PennyMac will require a property inspection per the above on all conventional loans with an appraisal waiver. In addition, Sellers may exercise appraisal waivers approved by DU and LPA after a disaster in accordance with the applicable Agency guidelines.
By the sale of the loan to PennyMac, the Seller warrants that the subject property is in marketable condition and that there are no repairs or other detrimental conditions to the subject property at the time of sale.
PennyMac is not responsible to provide notification to the Seller of disaster areas. If at any time after loan purchase, PennyMac or a subsequent investor, determines that the subject property was damaged and not in fully marketable condition at time of sale, the loan is subject to repurchase.