An important deadline for lenders is fast approaching: June 27. While some lenders are ready to migrate to HUD's EAD portal, others are behind on implementation. HousingWire sat down with David Mentesana, VP of operations and client development at MyAMC, to find out what this change means, and how his company is helping lenders get prepared.
HousingWire: The deadline for lenders to migrate to HUD’s Electronic Appraisal Delivery (EAD) portal is June 27. How ready are lenders for this change?
David Mentesana: Most of the lenders we work with are ready or are in the midst of completing the necessary steps. At MyAMC, we have completed our system development and went live the last week of April. MyAMC built a direct integration interface to allow us to submit hundreds of appraisals to the portal at one time.
HW: What will be some of the biggest challenges in delivering within the EAD format?
DM: Much like when UCDP went live, appraisers have to familiarize themselves with formatting changes. We have been communicating with our appraiser partners and working with them to ensure that they submit the appraisal correctly, especially in regards to the proper location and format of the FHA Case Number.
MyAMC has appraisers on staff with more than 20 years of industry experience to work with field appraisers and underwriters through new processes such as EAD implementation.
HW: How can MyAMC help lenders as they make this transition?
DM: We are helping our lenders by keeping them apprised of deadlines, driving changes to our system ahead of schedule, and ensuring that appraisers are able to deliver EAD-compliant reports before the June 27 mandatory implementation. EAD’s real-time feedback will allow lenders to identify data and compliance issues up front.
When issues are identified, MyAMC’s staff is able to review the issues and work with the appraisers to resolve issues prior to endorsement.
Although FHA is not currently providing risk scoring similar to FNMA’s Collateral Underwriter model, they will eventually incorporate this into the EAD features.
A deep understanding of the CU risk scoring model helps MyAMC subject matter experts add value for our lenders and appraiser partners through comprehensive analysis and guidance for optimal resolution.
Our team works closely with field appraisers to reduce warning flags and mitigate the risk of quality issues identified by the CU model. A high score, for example, may be driven by data that is inconsistent with what an appraiser has previously used in terms of condition, quality ratings, view, location, and other factors.
We help appraisers identify and quickly correct this issue, ensuring a supported value conclusion and typically a lower risk score.
At times, high risk scores may be triggered by peer appraiser reporting, despite the appraiser having correct data in the report. MyAMC supports all stakeholders to ensure that commentary is sufficient for underwriting to understand the drivers of the risk score.
For example, MLS may report 1,200 square feet of gross livable area, while the appraiser has actually measured the home and reports a different GLA. The appraiser may be correct, but the appraisal results in a high risk CU score.
HW: How does your investment in technology benefit your clients as they navigate these kinds of operational changes?
DM: The fact that we invested in direct integration well in advance of HUD’s mandatory implementation will make the entire process easier for our clients. MyAMC reviews the EAD results and provides valuable feedback to our clients and appraisers.
As automation and risk modeling continue to become a significant part of the appraisal process, MyAMC has the technology and operational expertise to support the collateral valuation risk assessment needs of our clients. Our automated quality control rule set and manual review processes drive consistency and quality for our clients. MyAMC’s expert appraisal staff is available to our customers to help them navigate a dynamic valuation services environment.