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New Appraisal Requirements for Conventional Loan Files

Posted on 12/20/2011 by Administrator Account in client advisory
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Earlier this year, both Fannie Mae and Freddie Mac have instituted a new set of compliance regulations for appraisals, called the Uniform Appraisal Dataset (UAD). All appraisals dated as of September 1st have included additional compliance codes to meet these requirements. Our Platinum Data Scrubber, along with our manual QC process helps to identify errors or reports missing the necessary UAD requirements.

The next phase of the UAD compliance rules is to require all appraisals for loans sold to Fannie or Freddie, to be delivered through a Uniform Collateral Data Portal (UCDP). In addition to the initial lender/investor reviewing the appraisal report for value, each report must be successfully delivered through the portal to either (or both) of the agencies (Fannie and Freddie) to ensure the UAD compliance code requirements are met. This new process is in place for all mortgage applications dated as of December 1st.

How will this affect the origination and appraisal process? There will not be any change to process flow for loan originators, except for the requirement to use an Approved AMC or another authorized agent (such as the lender specifically) that are already registered with the UCDP. The only difference is that in addition to (or instead of) receiving a .pdf copy of the appraisal report, the lender will now receive an additional copy in .xml format (an alternative file type to .pdf format). Both reports types will be provided to our lenders in most cases (some will prefer only the .xml file). Once the Underwriter has issued final sign-off on the appraisal, a final copy will be transmitted to the agencies (Fannie and Freddie) via the portal (UCDP). This process will be determined between each lender and the AMC.

UAD and UCDP is applicable only to the 4 major forms – 1004 Full, 1073 condo, 1075 condo exterior, 2055 exterior regardless of the lender. This requirement is not applicable for FHA, VA, USDA, or any conventional loan product not listed, or that is not sold to the GSE’s (Fannie and Freddie). This includes table-funded loans/ loans serviced by the lender.

NVS can deliver UAD requirements through to the portal (UCDP) utilizing 3 different methods currently:

1. The .pdf and/or .xml files are sent to RealEC, and RealEC delivers to the portal

2. The .pdf and/or .xml files are sent via email and posted to our website, and the lender will retrieve and upload the information to the portal themselves

3. The .pdf and/or .xml files are sent via a direct integration with the portal by NVS, using our normal delivery process currently in place

A “Hard Stop” may occur when attempting to deliver the appraisal through UCDP using 1 of the above 3 methods. Hard Stops are checklist items that have failed to pass through UCDP requirements, and either must be corrected by the appraiser, and then the entire file re-sent to UCDP (similar to our ‘dispute’ process) or must be ‘overridden’ in the event that the checklist has incorrectly impeded delivery to the portal. In either event, NVS is responsible for correcting the hard stop and re-delivering the .xml file. In the event there is a “Hard Stop” occurrence. An example of a hard stop:

1. 1073 condo form requires a unit number to be delivered.

a. As you may know, many condos do not have a unit number, only an independent address. In the event that no unit number exists for the subject, this Hard Stop can be “overridden” and the file pushed through to UCDP. In the event that the condo does have a unit number and it was missing from the report, a dispute would be filed to correct, and re-upload to the portal (again, using one of the above 3 methods.

Keep in mind, that delivery options 1 and 2 above have created virtually no changes in our current processes for delivery. Option 2 is only different in the fact we must deliver a different attachment (the .xml file). Process changes have only been added during the correction of Hard Stops, which NVS Quality Control managers can help to better explain.

Please feel free to share this information with your staff, or those who have questions. Please email any and all inquiries to UCDPAdmin@nationsvs.com. More info to come as our process is refined!
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