Uniform Appraisal Dataset
Fannie Mae and Freddie Mac failed to fully analyze data from the Uniform Collateral Data Portal and continue to take unnecessary risks when purchasing and guaranteeing single-family residential mortgages, according to a report from the Federal Housing Finance Agency’s Office of the Inspector General, Mortgage Daily reported Feb. 6.
The report indicated that the two government-sponsored enterprises are not taking full advantage of appraisal data collected through the UCDP that the Federal Housing Finance Agency directed the GSEs to use in 2010 in an effort to improve loan quality and risk management.
Mortgage Daily reported that the GSEs purchased and guaranteed six million loans valued at $1.3 trillion in 2012 alone. The UCDP was designed to make it easier for the GSEs to evaluate the large volume of loans that they are being asked to guarantee and purchase. The system notifies sellers if appraisals fail to meet Fannie and Freddie standards.
The OIG report (more…)
Appraiser Quality Monitoring Information
Fannie Mae has published a new web page with information about the recently implemented Appraiser Quality Monitoring (AQM) process. The new AQM web page includes FAQs and a link to the AQM list identifying appraisers whose appraisals will be subject to 100% review by Fannie Mae or whose appraisals are no longer accepted by Fannie Mae. The AQM list is protected content, and approved Fannie Mae sellers/servicers may set up access through Technology Manager.
Appraiser Quality Monitoring (AQM) FAQs
Fannie Mae began collecting appraisal data in 2011 through the Uniform Collateral Data Portal® (UCDP®). Millions of appraisals have been submitted by lenders and their authorized agents, enabling Fannie Mae to monitor and evaluate appraisals for data accuracy and consistency. Leveraging the availability of standardized appraisal data, Fannie Mae issued Lender Letter LL-2013-10, Appraisal Quality to remind lenders of Fannie Mae’s appraiser selection requirements, highlight several data quality issues, and describe new processes that Fannie Mae has implemented to identify and monitor individual appraisers. These FAQs relate to the Appraiser Quality Monitoring (AQM) process.
Q1. What actions will Fannie Mae take with respect to specific appraisers? (more…)
On December 10, 2013, Fannie Mae issued a lender letter focusing on appraiser selection, data quality issues, and new processes for appraiser monitoring, and has added messages in UCDP related to appraisals from specific appraisers.
Fannie Mae began collecting appraisal data in 2011 through the Uniform Collateral Data Portal® (UCDP®). Millions of appraisals have been submitted by lenders and their authorized agents through UCDP. UCDP enables Fannie Mae to monitor and evaluate appraisals for data accuracy and consistency. The purpose of this Lender Letter is to remind lenders of Fannie Mae’s appraiser selection requirements, highlight several data quality issues, and describe new processes that Fannie Mae has implemented to identify and monitor individual appraisers.
Appraiser Licensing Requirements
Fannie Mae performs a weekly check of appraisals submitted through UCDP against the (more…)
Fannie Mae will implement new proprietary appraisal messages in the Uniform Collateral Data Portal beginning Nov. 9, the government-sponsored enterprise reported Sept. 24.
The new appraisal messages will expand on existing Fannie Mae appraisal messaging and focus on providing additional data validation and reasonableness checks. The messages also will highlight possible eligibility concerns prior to loan delivery.
The data included in the reports is based on the appraisals provided to the UCDP in the previous month, and includes an overview of all appraisal messages (including Fannie Mae critical messages), (more…)
Three years after the creation of a database seeking to standardize the home appraisal process, Fannie Mae and Freddie Mac continue to see major issues in numerous appraisals submitted by mortgage lenders, American Banker reported Sept. 12.
Fannie Mae conducted a sampling of appraisals and determined that 17.6 percent contained contradictory information, typically pertaining to the condition or quality of the property, Robert Murphy, the GSE’s director of collateral and single-family risk policy, told a Phoenix conference of risk managers. He added that those two factors are the most important in determining a property’s value.
Elevated appraisals contributed to the housing market collapse because lenders frequently pressured appraisers
In the August edition of the AppraisalPort Newsletter, I reported on some of the general information covered at the National AI Connect Conference in Indianapolis, July 23-25, 2013. This was a great conference, covering a wide range of topics. This month, I want to pass on some information covered in one of the breakout sessions for residential appraisers.
The session was titled, “Residential Chief Policy Roundtable” and included presentations from Fannie Mae’s Robert Murphy, the Appraisal Institute’s Bill Garber, HUD’s Ada Bohorfoush, and the VA’s Gerald Kifer.
At Fannie Mae, Murphy handles many of the issues regarding appraisers and the appraisals they produce. He explained that since the implementation of the Uniform Appraisal Dataset (UAD) and data delivery to the Uniform Collateral Data Portal (UCDP), Fannie Mae has been able to capture appraisal data for all of the loans they buy. Before this program, they typically saw appraisals only when there was a problem with the loan but now they (more…)
Fannie Mae and Freddie Mac have released the specifics on phase two of the Uniform Appraisal Dataset (UAD) updates. The second phase will go into effect in
- Quality of Construction Rating (subject and comparables)
- Location Rating (subject and comparables)
- View Rating (subject and comparables)
- Condition Rating (subject and comparables) (more…)
Effective June 2013, Fannie Mae and Freddie Mac (the GSEs) will convert several of the current Uniform Appraisal Dataset (UAD) compliance warning edits to fatal UAD edits in the Uniform Collateral Data Portal.
Warning edits for the following data fields will convert to fatal UAD edits in June 2013:
- Appraisal effective date
- Subject contract price and comparable sale price (more…)
It has been eight years since the URAR form was revised. From 2005 to mid-2008, the real estate market experienced a boom and a bust the likes of which we have never seen before, and we are finally seeing a slow recovery. Also during this period, the economic recession and poor lending practices lead to new regulations in both the appraisal and banking industries. Based on the new regulations, Fannie Mae/Freddie Mac mandated appraisers to add more information to the URAR form.
As of March 2009, the Market Conditions Addendum to the Appraisal Report required appraisers to research and analyze the general market conditions. In September 2011, Fannie Mae mandated that appraisers employ the Uniform Appraisal Dataset (UAD) as part of the URAR form. The goal was to standardize information supplied by the appraisers on the forms, especially as to descriptions of quality and condition of the subject property and comparable sales. Another directive was that whenever adjustments are made to an appraisal for the year the dwelling was built (actual age) vs. the effective age, the appraiser must provide an explanation for the adjustments. Finally, Fannie Mae also dictated that the proximity of comparable sales to the subject must be stated in miles and include the “applicable directional indicator”. Many of these changes (more…)
As of January 28, 2013, Fannie Mae started placing greater restriction on the data they collect to ensure uniformity. You will now begin seeing a “hard stop” issued by Fannie Mae on messaging. This change affects Appraisers working with AMCs or other lenders who submit data to Fannie Mae.
What has changed?
As appraisers know, the Uniform Collateral Data Portal (UCDP) is an electronic tool that Fannie Mae uses to ensure uniformity in the data that Appraisers collect and submit. The theory is that being able to track trends and information through data collected on appraisals will ensure more informed lending decisions. In order to track trends and data accurately, it must be as uniform as possible.
What does that mean for Appraisers? (more…)
January 29, 2013 – Uniform Appraisal Dataset Update and Uniform Collateral Data Portal Release Notification
As communicated in the September UAD Update, Fannie Mae and Freddie Mac (the GSEs) will convert several of the current Uniform Appraisal Dataset (UAD) compliance warning edits to fatal UAD edits in the Uniform Collateral Data Portal® (UCDP®) during 2013. The first phase, targeted for implementation in June 2013, will include warning edits for the following data fields converting to fatal UAD edits:
- Appraisal effective date
- Subject contract price and comparable sale price
- Above grade Gross Living Area (GLA) (subject and comparables)
- Sale type (subject and comparables)
Warning edits for (more…)
It was a beautiful, early, fall afternoon. I had just completed my fifth inspection of the day and had just one more to do in the rural community of Island Park, Idaho, just outside of Yellowstone National Park. The cabin was setback in the trees and was surrounded on three sides by state lands. In other words, this 1004 UAD would have the ‘rural’ box checked on this one.
I had just begun measuring the outside when I heard a loud and extremely close bellow/snort. It is hard to explain, but it sounded like a cross between a cow moo and a moose call. I am used to hearing strange things in these woods, so I did not really give it even a second thought. A few minutes later, the homeowner emerged frantically calling for me. I rounded the corner (more…)
The GSE’s have issued a UAD newsletter on Sept. 18, 2012. Mostly has ‘stuff’ in it that appraisers should be doing, i.e., checking for proper UAD compliance prior to report submittal by using your report software on-board reviewer.
However, this little gem is the last item on page 2:
Update on Financing Concessions for Comparables
The GSEs expect appraisers to determine the financing concessions, if any, for all settled sales used as comparables in appraisal reports. Appraisers are expected to do what is necessary to determine concession amounts through the normal course of business (more…)
Over the span of the last several decades, many residential appraisers were brought into this profession to meet the demand for residential mortgage lending reports. The problem with this has become clear as many were trained with one mindset, residential lending appraisals. They became “self-proclaimed experts” at filing out forms and meeting client expectations. All in the name of doing a good job and making a living.
I hold all residential appraisers responsible for this sad state of affairs. Had more of the professional appraisers taken on one or two trainees and mentored them into producing credible reports then perhaps we could have held back the tidal waves of greed. Although even as I type this, I am already arguing with myself. The mechanism that was purposefully put in place to allow the aggressive lending decisions did and would have demolished and standard that was placed before it. However, if these standards had been in place and hammered into the industry all along, then we might have been able to avoid the debacle that continues to loom above us now. (more…)
Fannie Mae and Freddie Mac have added a new requirement for condo reports (form 1073/1075) in the updated UAD Appendix D, issued June 19, 2012 (see below):
Unit # The appraiser must enter the address unit number/designator. During the appraisal process if an appraiser determines that a unit number is not available for a property known to be a condominium, the appraiser must put a “-“ in the unit number field. The “-” symbolizes that the appraiser has researched the property address and was unable to identify a unit number for the given condominium unit. This is only likely to be necessary in a limited number of instances. This format option is allowable for both the subject property and the comparable properties. The address and unit number must be provided consistently for the subject property throughout the appraisal.
Reporting Format: Unit # – Text