Misinterpreted CU Update Message
Where the EDITs are used, they are within the "model properties"…
This is the message many appraisers have seen over the past week or so, which came from FNMA:
“During the weekend of Dec. 9, we will implement Collateral Underwriter® (CU™) 4.2, (which includes) the ability to edit the subject and appraiser-provided comparable sales property characteristics. CU 4.2 will also provide mortgage insurers (MIs) with access to CU. Lenders will be able to give their MI risk partners access to appraisal-specific data by providing them the Doc File ID generated at the time of appraisal submission.”
As so often happens with poorly written communications and instructions, many appraisers, including me, became alarmed about what that says.
Before I continue with this explanation, I want to acknowledge the many appraisers and others across this country who see my messages, and interact with me. Because this association has many deep and wide tentacles, there are appraisers who have employment at various levels in this industry, with vast experience and knowledge. There are also people inside banks, others are Chief Appraisers, while some are instructors, state regulators, and owners or managers of associated product development firms we interact with daily. I appreciate everyone who allows me to invade their cranium occasionally!
On 10/13/17, I had a phone conversation with a person inside a bank who has full knowledge of how FNMA’s CU works. This individual provided me with screenshots of CU data generated by an actual appraisal (without revealing the appraised property, value, ownership, etc). The call focused on how CU works and what this EDITING function can and will do, and won’t do.
The caller stated that the CU user (lender, etc.), or even CU itself (the giant data base in the sky), CANNOT MAKE CHANGES to the actual submitted report subject and comp data. This is what was misinterpreted in the FNMA message above. Report changes can only be done by the appraiser.
Where the EDITs are used, they are within the “model properties” which are generated by CU, but may include properties within the report, in addition to the other sales CU finds. These all are on a separate list outside the actual report. “Editing” is basically playing a “what if” game of chance with the CU “model properties” to see how modifications might change the Adjusted Range of Value – but not in the actual report. This can be used to assist the user in a report analysis function or perhaps to provide rationale for further communication with the appraiser about making changes to the report. Editing can also be used to see how the risk rating number changes.
Collateral Underwriter is an extraordinarily robust data base containing millions of properties – none directly available to appraisers who feed it. The caller told me it takes just a few minutes (less than 5) for a CU analysis report to be generated after a report is uploaded. CU also is a ‘black box’ with built in algorithms that in some cases don’t make logical sense when it generates suggested adjustment values across a collection of properties (which I saw in the sample). No one on the outside of FNMA can pry into CU to see how it actually works.
CU is a ‘fannie’ creation, and shared by Freddie Mac. None of the other agencies we deal with currently have anything that functions the same way as CU.
Things are not quite as dire as some of us reacted initially.
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