Collateral Underwriter White Paper
Fannie Mae’s Collateral Underwriter – Industry Update White Paper
I just found this document (PDF attached) written primarily from a ‘lender’ perspective about the upcoming Collateral Underwriter (CU), 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 run your un-signed report through your appraisal software’s on-board UAD checker and fix the items that are flagged. Then sign and deliver the report.
But unfortunately, the Collateral Underwriter process will do a procto exam on your report far beyond the UAD required items. So you may be asked for further clarifications, additions or corrections.
This entire process has been instituted due to the worldwide financial meltdown that started in 2008 – much of that blamed on appraisers because we are an easy target due to being collectively unorganized, and the layer upon layer of regulations by various entities mandated since then.
Continuing its focus on appraisal quality assurance, Fannie Mae™ has announced Collateral Underwriter™, a proprietary application that provides appraisal risk assessments to support proactive management of appraisal quality. Collateral Underwriter, or CU™, will be run against all appraisals submitted to UCDP™.
“Why you need a QC system at all”
You’ve already read the scary headlines about the penalties for inadequate quality control, and now Fannie Mae will be checking appraisal quality at UCDP. Investors will be armed for buy backs, and regulatory compliance violations range based on the violation, but they’re all calculated on a per-violation, per-day basis, and punitive and civil damages are added to the top. It’s not a pretty picture.
- Sale Price vs Appraised Value Disconnect - April 10, 2023
- Speed Regardless of Accuracy Under the Banner of Modernization - March 8, 2023
- Marin City Discrimination Case Settled - March 7, 2023
thank you very much for sharing! nice we are in the dark. I think it is fear mongering personally but will definitely read every detail on this. I know I haven’t ever gotten a hard stop error but I will definitely be double checking on all of this
Thanks for the info. I received my first hard stop the other week. How’s this for a system, on the form 1004 under Concessions/Financing type I chose the box Other (descibe) and on the line Other description I described what other financing was. This is the way I’ve been doing it since the start of UAD when necessary. Contacted my vendor and they (had to go to a supervisor) said oh just leave the Other description BLANK! I explained to them my system now states your report is not UAD compliant they said never mind we’ll just force it through! Can’t wait too see this thing go live…NOT
Better stock up on square pegs to drive into their round holes Tom!
Not sure what software you use but I run about 6 checks now. Not UAD compliance but the ucdp checks and 2 other reviews and of course spell check. I got an error because my my pending sales comp had a previous sale within the last 12 months, so I checked the box by the sales history. Error said this only applies to SALES comps so I unchecked the box, wrote more crap in the addendum explaining this sent it in. Some dumb ass says you are wrong that is the way all appraisers do it. I proved him wrong and of course no apology. I do know this that the lenders were scrambling a few months back to reconcile their ucdp uploads and correct any errors. So if there had been any problems we would know. I also subscribe to every fnma bulletin, and every other bulletin I can and also have lenders who send me stuff.And update my software once a week. how do you spell data mining