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Appraisals and Valuations

Fannie Mae approves six vendors for controversial new valuation initiative

Participating service providers are Solidifi, Class Valuation, Clear Capital, Mueller Services, Accurate Group and Black Knight's Collateral Analytics LLC

Fannie Mae has approved six firms to handle its new valuation initiative, which cuts traditional appraisers out of the process and potentially represents the biggest shift in the valuation space in years.

Fannie Mae last Wednesday updated its Selling Guide to include more options for property valuations, saying that the GSE is “moving away from implying that an appraisal is a default requirement.”

Those options include value acceptance – formerly known as appraisal waivers – as well as “value acceptance plus property data and hybrid appraisals.”

The participating firms, which will collect appraisal data and put it through Fannie Mae’s API, include some of the biggest names in the mortgage tech space: Solidifi, Class Valuation, Clear Capital, Mueller Services, Inc., Accurate Group and Black Knight‘s Collateral Analytics LLC.

For the new value acceptance plus property data option, third parties are authorized to do that collection at the property site, as long as lenders verify that they have a background check, have been “professionally trained” and are competent to do that collection. This data can only be submitted through Fannie Mae’s “Property Data API.”

In a statement Friday, Accurate Group said it has completed more than 3 million property data inspections and hybrid appraisals through its ValueNet suite of products.

Accurate Group is one of the two companies under the approved service providers for Fannie Mae’s Value Acceptance + Property Data that also offers title and closing solutions along with valuation services, said Paul Doman, president and CEO of Accurate Group.

“That’s a big statement – we’re a one-stop shop for lenders giving them a significant advantage over their competitors,” Doman remarked. “Our appraisal, property inspection, title and closing technologies are designed to plug into any digital platform.”

Among other initiatives the company is taking to digitize its real estate lending process is expanding its affiliate appraisal management platform AppraisalWorks to include title and closing services, Doman added.

Kenon Chen, executive vice president of strategy and growth at Clear Capital, told HousingWire last week that the potential for modernization in the industry is huge with Fannie’s announcement.

“This is a standardized data collection done at the property, which brings objective, transparent data into the whole process,” he said. “I think that not only drives this program, but paves the way for a better appraisal process when an appraisal is needed.”

Appraisers, as one would expect, are up in arms about Fannie Mae’s new initiative.

“I encourage all appraisers to take a very serious examination of their current business model,” wrote Washington-based appraiser Dave Towne on AppraisersBlog.com. “Shift NOW as much appraisal work as possible away from Fannie Mae. Because if the Fannie Mae trend continues, you won’t have any of that business in the future anyway.”

One appraiser of 23 years told HousingWire that there are real questions to be asked about the reliability of people hired to collect the data on behalf of the vendors, which could be real estate agents or others Fannie Mae deems “professionally trained.”

“I have found that there is a wide range of competence when it pertains to agents,” the appraiser said. “There are a lot of agents that are just in the business of selling with no real idea of what it is they are selling.  Agents are coached to use sources such as county records to state property square footage. I am not confident that many will ant to take on that task as it could lead to bigger issues for them down the road. What if they miss-measured a property that now is their listing?”

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