Day One of the UAD and the Quest for Increased Loan Quality
Sept. 1, 2011 marked the first day requiring lenders and their agents to submit appraisal reports in compliance with the Uniform Appraisal Dataset (UAD) for conventional mortgage loans sold to the government-sponsored enterprises (GSEs), Fannie Mae or Freddie Mac. The UAD is a component of the Uniform Mortgage Data Program (UMDP), jointly established by the GSEs under the direction of their conservator, the Federal Housing Finance Agency (FHFA), to provide common requirements for appraisal and loan delivery data. The program is designed to improve the quality and consistency of appraisal data on loans delivered to the GSEs. The UMDP implements two of Fannie Mae's Loan Quality Initiative (LQI) objectives, the electronic submission of appraisal data and the collection of additional loan data in an updated format, through a uniform approach that facilitates lender adoption through uniform datasets and file formats. “We’ve taken great care with these measures so that our lender clients can feel confident that their appraisal reports and their processes will be in compliance with existing and upcoming requirements," said Tony Ebeyer, chief operating officer of StreetLinks Lender Services. "As their valuation partner, we’ve got them covered." The UMDP includes: ►A Uniform Appraisal Dataset (UAD) that standardizes key appraisal data elements to enhance data quality and promote consistency. ►A Uniform Collateral Data Portal (UCDP) for the electronic collection of appraisal data to minimize impact on lenders. ►A Uniform Loan Delivery Dataset (ULDD) that leverages the industry-recognized MISMO Version 3.0 standard. According to Fannie Mae, adoption of a commonly understood dataset and format will reduce ambiguities in the type and definition of data points required for selling loans to the GSEs. Through the collection of additional data at a more granular level, market participants will have an increased, common understanding of loan data. Also, over time, lenders will be able to move away from providing proprietary processing codes that can be misinterpreted or incorrectly mapped to delivering root data that can be accepted by both GSEs. As lenders prepare for the transition to the new UCDP, there are a few key steps to keep in mind, advises Jennifer Creech, president and chief executive officer of appraisal management technology company InHouse Inc. “There is a lot to do to prepare for these changes," said Creech. "Among other things, some lenders don’t realize they and their designated agents both need to register for UCDP and set up their business profiles before they can deliver appraisal data to the UCDP." Click here for a complete overview of the UMDP and clcik here for some UMDP FAQs.