© 2018 Fannie Mae 13/19/2018

FANNIE MAE REO Inspection Tutorial

© 2018 Fannie Mae 23/19/2018

Why you are here and why YOU are so important to us!• Neutral 3rd party quality control inspections are an important part of any business by receiving data from people who do not have a

vested interested in the outcome of the data, and objective responses.

• Fannie Mae completes quality control inspections on both pre-foreclosure and post-foreclosure properties in order to gather data on awide range of vendors performance, marketing and overall condition of our assets.

• Fannie Mae spends on average more than $200,000,000 a year (that’s $550,000 a day!) just on the maintenance of the properties youinspect. Your data adds tremendous value by identifying opportunities and trends for maintenance vendor improvement, and helpFannie Mae where to direct our resources. The decisions we make depend heavily on accurate and complete data from your inspections.

• Fannie Mae’s top 3 priorities maintenance priorities include:• Safety – Anyone who steps foot on our property should be free of safety concerns, including you. Accurate reporting will help us manage the

maintenance vendors and immediately address safety concerns. This prevents lawsuits but MOST importantly – nobody gets hurt!

• Neighborhood stabilization – The commitment we have in place to improve the appearance of our properties, ultimately helps to improve andboost neighborhoods by removing the blight and stigma of a foreclosed property.

• Marketability – Every day a foreclosed asset sits in Fannie Mae inventory, it costs money while at the same time increasing the risk of vandalism ortheft. Being able to market a safe, sound and secure property as quickly as possible while using our resources effectively, saves taxpayers like yourselfmoney and puts someone who cares about the property into occupancy.

• The purpose of your inspection is to note property maintenance deficiencies that reflect poor quality of work. The condition of the assetshould not be held against the vendor or noted as deficiencies unless the condition is a result of poor property maintenance. Yourinspections tell a story, so when we face litigation or the need to research a specific time or event, your photos and accurate informationprovide the time line and evidence we need.

• Fannie Mae is a leader in the mortgage industry. We pride ourselves on working with the best talent in the industry. YOU are a hugepart of the talent we count on every day to attain our goals and mission. From the bottom of our hearts, we appreciate all you do!

© 2018 Fannie Mae 43/19/2018

Exterior Inspection

Once the correct property has been located by the inspector, the most logical starting point would be to inspect the exterior.

• Most of your photos can begin from the street:street view, address ,front, 2 sides , rear, realestate signs if present and address verification

• Walk around the entire dwelling. If the propertyhas a large lot walk the depth and width of the lot.

• Observe all sides of the dwelling, the roof, thelawn, sidewalks, driveway, fence, porches, patios,decks, trees, flowerbeds, all outbuildings andaccessory structures.

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Photo Requirements: ExteriorEvery inspection requires photos detailing the condition

of the property and all deficiencies noted.

Wide angle view of..• Street view• Address• Front of dwelling• Back of dwelling• Left and right sides

Real Estate Sign

Outbuildings

HVAC

Also required: pools, emergency situations, condition of the grounds, missing items such as an A/C unit and all noted exterior deficiencies.

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Clear and Up-close Photos of Deficiencies

Make sure to take a good photo of the deficiency, so it is easy to identify in your photo.

Gutter debris – unacceptable photo Gutter debris – acceptable photo

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Acceptable Fannie Mae window posting and Door Mat

(Note: neither are considered a homepath.com rider sign, marketing material or debris).

Door Mat Fannie Mae Window Posting

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Exterior Deficiencies

• The entire property, including window wells, should be free of debris including; fallen tree branches, trash, leaves, broken glass, plastic grocery bags, random large stones/bricks etc. A weekly accumulation of leaves during Autumn is expected.

• Driveways and sidewalks should edged.• There should be no weeds growing in driveway

and sidewalk cracks.• Bushes and shrubs should be trimmed neatly

and no vegetation should be touching the asset.

• Handrails are required per local code ONLY, there is no 3-riser or more requirements.

Debris

Edging

Shrubs

Weeds

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Exterior Deficiencies

• How tall is the grass: • 1-2 inches • 3-4 inches• 5+ inches• No grass - Rockscape

• The grass/weeds should be edged around the foundation, fence line, walk and driveways.

• Look for hidden deficiencies; broken glass, holes in the ground, debris, etc.

• Grass clippings should be removed.

• There should be no abandoned vehicles including; automobiles, RVs, boats, motorcycles, ATVs, etc.

Abandoned vehicle

Grass clippings not

removed

Fence -line

Grass height?

Potential for hidden

debris

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Exterior Deficiencies

• All decorative shrubs should be trimmed and pruned in front view areas. This includes side shrubs if viewable from front or on a corner lot. Shrubbery should not infringe upon a walkway, sidewalk, or driveway.

• Front facing defined flowerbeds should be weeded, with a weed barrier and 2-3 inches of mulch. This includes side beds if viewable from front or corner lot.

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Exterior Deficiencies• The gutters should be free of debris and

vegetation.

• The gutters and downspouts should be properly attached and direct water away from the structure.

• The roof should be free of debris.

• Trees and branches should not touch the roof or roofline of the dwelling.

• Roof tarps need to be secure and in good condition.

• Note areas where sections of gutter or downspouts are missing in deficiencies. NO gutters at all are OK, and not a deficiency.

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Exterior Deficiencies

• Light fixtures on the first level of the dwelling must have light bulbs.

• All exposed wires must be properly capped.

• Windows should be clean and secure.

• Plywood boarded windows and doors are only allowed on fire or severely damaged assets.

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Snow Removal

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Snow and Ice RemovalFannie Mae expects snow and ice removal to be in compliance with all local codes and ordinances.

Snow removal service includes:• Snow or ice should be removed from ALL steps, driveways, decks,

porches and walkways on the property, including the public sidewalk in front of the property, and a melting agent applied. This ensures safe access to the property and parking areas such as garages, carports, etc.

• Snow and ice should not impede access to the property.

• A deficiency should be noted when snow removal services have not been performed, are incomplete or were done incorrectly. For example, snow pushed up to the garage door may have removed snow from the driveway, but it should not prevent access to the garage.

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Front Door Lock Box Photos

• Best Practice – When you have interior access: Take Photo of open Lock Box, key in door and door open.

• If no lockbox is present, take a look around the property. It could be on one of the doors, handrails, meters, light/lamp posts or even bush/tree branches (we have seen it all!). If no lock box, try to take photos in “additional” photos showing no lockbox.

• If no lockbox, code does not work, key is missing or does not work, call from site and document in exterior notes that Listing Agent was called or notified.

• Listing Agent may be able to give you code on phone and then able to complete inspection.

• PLEASE NOTE: LISTING AGENT MUST BE CALLED FROM SITE IF THERE IS ANY EMERGENCY.

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Photo Requirements: Interior

Wide angle view of every room in the house: kitchensliving rooms, dining rooms, bedrooms, bathrooms, family rooms, basement (all rooms), attic (when accessible).

If missing, take photo of missing room or item for photo requirement

Smoke & CO2

detectors, Air

freshener

Mechanicals

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Photo Requirements: Deficiencies and Hazards

All deficiencies require a photo. The best photos clearly depict the deficiency.

Make sure to take a close up of the deficiency being noted for clarity.

Great!

Incorrect

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Interior Maintenance – What we see!

Debris?

Baseboards clean?

Floors clean?

Cover plates clean and secure?

Windows clean and secure?

HomePath specific flyer

Cabinets and drawers clean and

debris free?

Sink and counters clean?

Gas cap on and secured?

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Appliances

All appliances that are present must be cleaned:• Range• Oven• Dishwasher• Microwave• Trash compactor• Refrigerator

Please note: dirty appliances are a deficiency, permanently stained appliances are not a deficiency.

Missing appliances are not a deficiency. As long as you take different angles of the kitchen in multiple photos, we will see the appliances are missing.

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Deficiencies can be anywhere!

Nails

Missing electric panel cover

Damprid Missing cover plate

Broken glass

Missing floor

register

Uncapped gas line

Uncapped water lines

Exposed tack strip

Unsecure light fixture

Uncovered dryer vent

Unsecure crawl space

Missing lightbulb

Uncapped wires

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Look Up and Down!• Check light fixtures for burned

out, broken or missing light bulbs

• Check ceiling fans and blades for dirt or dust.

• Ceiling fixtures that are not secure and hanging down are a deficiency.

• Check walls, floors, door frames and baseboards for dust (not stains). Note: Holes in walls are NOT a deficiency.

• Look for hidden debris, in cabinets, under sinks on top of kitchen cabinets. Things will hide anywhere!

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Open and Look Inside

Debris in drawers Dirty toilet Open water

lineMissing

cover plate

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Interior Windows

Dirty inside

Unsecure windows that are

open upon arrival, missing

lock or both

Broken or cracked

glass

Dirty sills

Hardware should be removed

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Bathrooms

Mirrors clean?

Sink clean?

Toilet clean inside and out?

Presence of non-toxic

antifreeze?

Floors and baseboards

clean?

Bathtub clean?

Walls clean?

Air freshener present?

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Winterizations at a glance

Correct Incorrect

• Non-toxic anti-freeze in toilet• No water running from faucets• Faucets should not experience any pressure when turned to the on position.

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Deficient

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When Appliances and Fixtures are missing look for……Uncapped water line

Uncapped water line

Uncapped wires Uncapped

gas line

Uncapped wires

Uncapped gas lineUncapped

gas line

Holes in floors

Uncapped water lines

Uncapped wires

Missing hvac

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MECHANICAL AREASALL ROOMS & AREAS

including but not limited to:

• Nails, Screws, Hooks & Brackets in Walls

• Missing or Inoperable Lightbulbs

• DampRid present

• Holes in Floors

• Exposed Tack Strip

• Missing or damaged cover plates

• Uncapped Wires

• Missing or not functioning sump pump

• Unsecure light fixtures

Missing electrical panel cover

Non-functioning or missing

sump pump

Uncapped water lines

Nails & Screws

Deficiencies

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Clear Boarding VS Plywood Boarding

• Clear boarding is to be used on all dwelling and garage windows. Additionally, on detached outbuildings with street viewable windows.

• Plywood is not a deficiency in cases of hurricane boarding or extensive fire damage.

• Proper clear boarding installation includes:• Installed securely within the frame of the window • Secured using brace bars and carriage bolts.• It should be snug enough to prevent outside

elements or intrusion.• Bolts cut to one inch and capped.

BEFORE AFTER Too Loose Bolts too long and not capped

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Emergencies:

• Active water leak or standing water

• Animals or pets

• Gas leak

• Unsecure (windows or doors to the main structure and/or garage)

• Gas cap missing or not properly installed

• Downed power line

• Property occupied

• Extensive discoloration: Greater than 100 contiguous square feet

• Infestation – insect or rodent (interior only)

• Other – describe in open comment field

Report all emergencies in WorldApp and place a call to the agent while on site. Phone number can be found on real estate sign, on agent posting in window or on the main questions page of WorldAPP.

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Things to Remember• Document and photograph all deficiencies accurately. If there is an issue and it is not on the list, use the

additional photo section and provide a comment. Make sure to document emergencies properly, additional photos will only provide extra space, but will not notify anyone of serious issues. You can take as many photos as you need/want in additional photos. Also, for example if there is no basement, you can use the “basement” photos slots to take additional photos if needed. Confirm all required photos are taken as noted with a red asterisk.

Correct

Incorrect –this is not a deficiency

Missing deck with unsecured slider is unsafe

Incorrect –this should

be an “other” emergency

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Tips and Tricks to WorldAPP

When you answer “Yes” to the question “Do you have interior access to complete the inspection?” The Photo Library is populated with interior photos.

All photos with a red asterisk are required and must have photos to submit the inspection. We do recommend using as many photos as you need to tell a story. You are not limited to only the required photos.

All deficiencies marked require a photo.

When you have a situation that doesn’t fit into an emergency or any deficiency, please use additional photos and label the photo to note the concern. You can always use interior/exterior comments to describe the issue as well.

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Tips and Tricks to WorldAPP

If the inspection cannot be completed for some reason and you need to return at a later time, click Save and exit the inspection. To open the inspection again click on the task, then click Edit. NOTE: It is expected that ALL inspections and photos are to be completed while on-site at the property. Fannie Mae considers incomplete or inaccurate reports, doctored photos or photos of a computer screen, to be unacceptable.

When the inspection is complete click Submit. Once the inspection is submitted, there is no way to edit or change your responses. You would need to have the QC Company reject your inspection in order to update anything. Once you have a strong Wi-Fi connection, you can “upload” from the drop down in the top left corner. This will submit your form for QA review at the QC Company.