Uniform Appraisal Dataset
Many of you know I scan various sources for appraiser/appraisal related info, and send out items I think are important.
Well, today Collateral Underwriter (the extraordinarily SECRET process developed by FNMA and given ONLY to LENDERS for report review) started.
As predicted by many appraisers, it already generated responses appraisers are forced to deal with, primarily because the reporting appraiser’s data (in the report) is different from “peer” reports.
As a poster to one of the forums said:
Fannie Mae’s new “tool” for lenders is the Collateral Underwriter (CU). This is a review program available to lenders so that they can compare the work of an appraiser on a property to other work the appraiser has done and to what other appraisers have done on appraisals of the subject property. This program compares your report to others. Comparing your work to all of the information they have in their database, using data from other appraisers to evaluate your work.
DON’T PANIC! Remember when the UAD came out and there was great angst among residential appraisers? Yet when the dust cleared, life went on and we adjusted. The same will happen with the CU. Many of you may not know that there has been review system called an AQM or Appraisal Quality Management that was designed to look at you through an Appraisal Management Company. The AQM is a software system that compares reports to industry standards and requirements. It has been in place for several years.
The CU (more…)
I’ve always said that I think it’s insane that everyone has access to appraiser-provided data EXCEPT the appraisers who generated the appraisals in the first place. That needs to be fixed. So, we’re creating a system enabling you to seamlessly share comps among yourselves. You’ll have the same data that’s being used to judge you.
We’re confident it will be effective: a la mode users alone generate enough appraisals per day to cover the entire market with high quality subject and comp data. With just the existing TOTAL and Aurora users joining in, tens of millions of comps will be available, exactly like in Fannie’s system – in high-quality UAD format.
How do we know that? (more…)
The latest ‘buzz word’ in our profession is an indication from Fannie Mae that as of Jan. 26, 2015, their Collateral Underwriter electronic review software (made available only to Lenders/AMC’s for 1004 and 1073 reports) will be able to compare your report info to other property reports and data narrowed down to a local CENSUS TRACT.
In my previous messages, I’ve asked a basic question:
When’s the last time you actually researched comparable sales or other property info based around local CENSUS TRACTS?
I would guess for the vast majority of (residential) appraisers you never have!
I would also bet that most appraisers never have seen (or even cared about!) (more…)
A few days ago, I watched the FNMA eLearning webinar “Introduction to CU” video showing how their new Collateral Underwriter will be implemented, starting on Jan. 26, 2015, applying to 1004 and 1073 Reports (initially).
You really should watch this also! CU applies to FANNIE MAE only; FreddieMac, VA, FHA, USDA are not involved at this time.
Click this link, and you’ll find the link to the video ½ way down on the left: https://www.fanniemae.com/singlefamily/collateral-underwriter
I captured a few screen shots of their presentation to help explain what will happen, and have added comments below:
Appraisers and report reviewers,
FannieMae issued an update to their Selling Guide on 12/16/14. It contains this pretty major change to their guidelines:
Adjustments to Comparable Sales
As a result of an analysis of Uniform Appraisal Dataset data specific to comparable adjustments, Fannie Mae has eliminated the 15% net and 25% gross adjustment guidelines and has provided clarification with respect to Fannie Mae’s expectations for the appraiser to analyze the market for competitive properties and provide appropriate market based adjustments without regard to limits on the size of the adjustments.
Appraisers should be concerned by Fannie Mae’s lack of transparency about its Appraiser Quality Monitoring system (AQM). In their published guidance and in various interviews, in the upcoming print edition of WRE (January 2015) and elsewhere, they remain mum on the specifics of a process that can potentially end an appraiser’s career.
If they have rules, procedures and guidelines in place to evaluate the work of appraisers in a fair and consistent manner, they are not making the details public. We believe it’s time that they do so.
This is from the cover story in the upcoming print edition of WRE, now in production:
Just as Fannie Mae promised in their July 2014 AQM FAQ, appraisers are now beginning to receive warning letters that their appraisals contain inconsistencies, inaccuracies, or data anomalies that may warrant “further action” should such behavior continue. Fannie Mae says that the intent of these communications is for “training and educational purposes” and to provide appraisers with an opportunity to improve their work before Fannie places them on the AQM (do not use) list. Appraisers across the country are receiving such letters from Fannie currently.
I just found this document (PDF attached) written primarily from a ‘lender’ perspective about the upcoming Collateral Underwriter, which applies only to 1004 and 1073 form reports effective Jan. 26, 2015…but probably will be carried over to the 2055 and 1075 form reports after the initial shake out cruise.
13 pages – will help you understand what FNMA will be looking for in terms of appraisal report QC functions performed by AMC’s, and the lender’s appraisal review departments. Knowing what they will be checking will help you avoid those errors.
Your first level of defense is to (more…)
The recent announcement that Fannie Mae will expose its sellers to the Collateral Underwriter™ (CU™) appraisal review tool has appraisers wondering if the process will affect their current and future appraisals and even present problems for past appraisals. Well, from the appraiser perspective, the short answer is you probably won’t notice much difference when this change takes place in January 2015.
Fannie Mae’s Collateral Underwriter appraisal review process is not a new concept. This is the same tool that Fannie Mae has been using internally to review appraisals submitted to the Uniform Collateral Data Portal® (UCDP®). Receiving the appraisals as electronic data files allows Fannie Mae to use their proprietary analytic tools to look for potential issues with every appraisal. Data is also compiled about each appraiser (more…)
The new Collateral Underwriter electronic review process developed by Fannie Mae has many appraisers on edge. This will become the ‘ultimate authority’ or gold standard for reviewing appraisal reports as of January 26, 2015… at least as far as FNMA is concerned. Your reports will either ‘pass’ or ‘fail’, depending on many factors. Some of those factors are outside your immediate control.
“Big Data” is one giant pile of stuff that is being put into the CU pot, stirred together like a stew. Except there is no master chef involved that ‘we’ can interact with. Instead we have a bunch of secret sous chefs each contributing a chunk of meat, a bit of spice, some chopped carrots, and a few potatoes. None of them, or us, really knows the actual CU recipe, because part of what’s in the stew is a ‘model’ of something unknown. But some of that Big Data in the CU stew could be yours … or it might be data provided by your peer appraisers who (more…)
Many know by now that the GSE’s, primarily Fannie Mae, have instituted a new ‘appraisal scoring’ procedure based on an electronic read of your reports, specifically on a SFR 1004 or the Condo 1073. Those are the only forms currently being analyzed by the CU process.
On Nov. 18, 2014, FNMA released a document named “UCDP Fannie Mae Appraisal Messaging Change Notification” which you can find here: https://www.fanniemae.com/content/release_notes/ucdp-change-notification-01262015.pdf
I encourage all appraisers to actually read this document … all 11 pages.
When you do read this document, you will learn that your reports are being compared to your peer’s reports, and to your other reports, and to some unidentified ‘model’ FNMA uses. (more…)
Online Petition to Allow appraiser Access to Data They Provided Through the Uniform Appraisal Dataset (UAD)1
I am asking that you to take a moment to participate in this important industry effort.
Fannie Mae’s Collateral Underwriter (CU) will be available in the first half of 2015. The CU performs automated risk assessment of appraisals submitted to the Uniform Collateral Data Portal based on information that you provided through the Uniform Appraisal Dataset (UAD). The CU provides a risk score, flags, and messages to the lender.
The GSE’s have mandated that all appraisals be submitted in the UAD format; however, currently there are no plans to provide appraisers access to this data. (more…)
FNMA Collateral Underwriter Flyer showing info about the FNMA Collateral Underwriter process they will make available to lenders (NOT APPRAISERS) in January 2015. You should review it. It has to do with their Enhancement of Risk Controls.
This is what we know as Appraisal Quality Monitoring (AQM) … which was announced almost 2 years ago. FNMA has already been using the ‘scope’ on your reports, but will soon allow the lenders to have access to the software so that they can do pre-submittal exams prior to uploading the loan file, and your appraisal, to FNMA. (more…)
OK, I admit it. I am old school. I still think you need to understand how to do something manually before you throw caution to the wind and buy into new technology to replace a good, old-fashioned, hands-on process that has worked fine for years. I honestly believe the use of technology without a complete understanding of how to do the basic process manually just lets us make more frequent and more complicated mistakes faster. In other words, if you can’t drive a Chevy Nova very well, don’t buy a Maserati Ghibli and expect it to fix your driving problems. All that will happen is that you will be going faster when you hit the wall.
What does this have to do with the Form 1004MC? In the old days when television was black and white and when reporters reported the news instead of making it up, the officers of banks and savings and loans had to decide what their home loan lending policies would be. First, they had to decide if they would offer home loans at all. Next, they had to decide what cities they would make loans in (typically they would only loan in markets where they had deposits so they had firsthand knowledge of those markets). (more…)
If you were an appraiser looking for more work, this year’s Valuation Expo at the Flamingo Hotel in Las Vegas, June 23-25, was a good place to find it. Attenders included many product vendors, AMCs seeking appraisers, and representatives from agencies such as HUD and the VA.
Four sessions were offered for CE credit: “Keynote – panel of government and GSE representatives,” “Alternative Valuations,” “Valuation Visionaries,” and “Regulatory Compliance.”
In this month’s newsletter, I’d like to share some of the information covered by the Keynote panel: David Bunton of the Appraisal Foundation; Robert Murphy of Fannie Mae; Robert Frazier of the FHA; and Gerald Kifer of the VA.
Up first, Bunton shared information from the Appraisal Foundation, under which are all of the following: (more…)