Reverse

Appraising: Appraisers See Changes to the Uniform Mortgage Data Program

Written by John Golden, as originally published in The Reverse Review.

There were several announcements at the end of the 2013 calendar year related to components of the Uniform Mortgage Data Program (UMDP) that affected appraisal practices at the beginning of this year.

The Uniform Appraisal Dataset (UAD) component of the UMDP provides common requirements for appraisal and loan delivery data. Its purpose is to improve the quality and consistency of appraisal data for loans delivered to Fannie Mae and Freddie Mac, to define required fields for appraisal submission, and to standardize definitions and responses for a key subset of fields on appraisal reports.

While the UAD has been in place for several years, standardization and specific formatting of two additional fields within the Sales Comparison Approach of the appraisal report went into effect earlier this year. Below are details about the new guidelines:

New Style Standards A new, standardized response format set forth in the guidelines includes approved abbreviations describing a property’s attachment type, followed immediately by the structure’s number of stories, a semicolon and a description of the structure.

Attachment type abbreviation choices include: AT: attached structure DT: detached structure SD: semidetached structure An example response for a detached, one-story property would be: DT1; Ranch.

The new guidelines also outline standardized response formatting and approved abbreviations for condominium properties, which require a description of the attachment type followed immediately by the property’s number of levels (indicated by the letter “L”), a semicolon and a description of the condo building.

For condominium property types, the attachment abbreviation choices are: DT: detached structure RT: row/townhouse GR: garden MR: midrise HR: high-rise O: other An example response for a two-story townhouse condo would be: RT2L; Twnhse.

Instructions have also been spelled out for properties that have garages or carports. In such cases, the appraiser would indicate the number of car spaces, which would be immediately followed by an approved abbreviation describing the type of off-street parking. In the event there are multiple types, they should be listed in a single-string response.

Off-street parking abbreviation choices are: ga: attached garage gd: detached garage gbi: built-in garage cp: carport dw: driveway none: no off-street parking An example response for a property that has a two-car, attached garage with double-car driveway, one-car detached garage and a single-space carport would be: 2ga1gd1cp2dw. The order in which these details are listed is specific in accordance with the new style standards.

Condominium buildings also have style standards to indicate the type of off-street parking available. In this instance the number of car spaces would be followed immediately by an approved abbreviation describing the type of parking. In the event there are multiple types, they should be listed in a single-string response.

For condominium property types, off-street parking abbreviation choices are: g: garage cv: covered op: open An example response for a condo with a single open car space and a single garage car space would be: 1g1op.

The other major announcement this year was specified in Lender Letter 2013-10, in which Fannie Mae confirmed that it began collecting appraisal data through components of the UMDP in 2011, and shared information on a new Appraisal Quality initiative based upon its new ability to identify certain inaccuracies and inconsistencies in appraisers’ reports. Examples of such issues would be sales data or the size of a comparable within the Sales Comparison Approach that stands out against information collected on the same comparable in other appraisal reports. Another example that would draw Fannie Mae’s attention would be an appraiser’s classification of a property’s condition for a comparable sale on a transaction that was different from several unrelated reports in which the same comparable was utilized.

Fannie Mae intends to work directly with appraisers who exhibit a pattern of minor inaccuracies or inconsistencies. However, repeat offenders or those with more egregious issues will have all of their submitted reports subjected to a post-purchase review. Fannie Mae also retains the right to refuse appraisal reports completed by appraisers whose work has been deemed consistently problematic. Earlier this year, Fannie Mae issued a working Appraiser Quality Monitoring list for its approved seller/servicers to keep them informed of appraisers whose work the agency will no longer accept.

HUD has formally adopted all UAD requirements, and so the above-mentioned standardization and formatting standards are fully applicable on FHA-related files. In regard to Fannie Mae’s new monitoring system, it remains to be seen exactly what impact, if any, it will have on the status of FHA roster appraisers, or if any of the information related to the Appraiser Quality Monitoring list will be shared between the two organizations.

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