Disaster Policy

Disaster Overview

PennyMac considers a Disaster any event that causes substantial damage. Disasters include but are not limited to:

  • Hurricanes/Tropical Storms
  • Earthquakes
  • Floods
  • Landslides
  • Tornadoes
  • Wildfires
  • Volcanic eruptions
  • Nuclear accidents
  • Terrorist attacks
  • Thunderstorms

 

Disaster Awareness

It is the Correspondent’s sole responsibility to be aware of and act upon any mortgage loans impacted by disasters prior to the sale to PennyMac.

The Correspondent 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 Correspondent has reason to believe sustained damage in a disaster.

Documentation Requirements:

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.
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.

DU Refi Plus Exception: Correspondent may utilize the Property Fieldwork Waiver (PFW) for valuation purposes. However, the PFW must be accompanied by an eligible inspection product (see above) for a period of 90 days from the incident period end date.

LP Open Access Exception: Correspondent may utilize the Home Value Explorer (HVE) for valuation purposes. However, the HVE must be accompanied by an eligible inspection product (see above) for a period of 90 days from the incident period end date.

FHA Streamline. VA IRRRL and USDA Streamlined-Assist Refinance Exception: Correspondent must provide an eligible inspection product (see above) for a period of 90 days from the incident period end date.   

Note: Since loans utilizing PIW/PFWs, AVMs, or no valuation product do not contain an appraisal date, PennyMac will consider the note date the appraisal date when determining documentation requirements.

Warranty

By the sale of the loan to PennyMac, the Correspondent 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 does not have the responsibility to provide notification to the Correspondent 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.