GSEs New Appraisal ProgramsUniform Appraisal Dataset – UAD

Uniform Collateral Data Portal - UCDP

Presented by:Brian Coester

Jeff Jurin

The “point” of this Seminar

There is NO

Point

Examples

Abbreviation Full Name Fields Where Abbreviation May Appear

Ac Acres Area, Site

AdjPrk Adjacent to Park Location

AdjPwr Adjacent to Power Lines

Location

A Adverse Location & View

ArmLth Arms Length Sale Sales of Financing Concessions

ba Bathrooms (s) Basement & Finished Rooms Below Grade

Br Bedroom Basement & Finished Rooms Below Grade

Cash Cash Sales or Financing Concessions

CtySky City View Skyline View View

CtyStr City Street View View

What Law is this?SEC. 1502. CONFLICT MINERALS.(a) SENSE OF CONGRESS ON EXPLOITATION AND TRADE OF CONFLICTMINERALS ORIGINATING IN THE DEMOCRATIC REPUBLIC OFTHE CONGO.—It is the sense of Congress that the exploitationand trade of conflict minerals originating in the Democratic Republicof the Congo is helping to finance conflict characterized by extremelevels of violence in the eastern Democratic Republic of the Congo,particularly sexual- and gender-based violence, and contributingto an emergency humanitarian situation therein, warranting theprovisions of section 13(p) of the Securities Exchange Act of 1934,as added by subsection (b).(b) DISCLOSURE RELATING TO CONFLICT MINERALS ORIGINATINGIN THE DEMOCRATIC REPUBLIC OF THE CONGO.—Section 13 of theSecurities Exchange Act of 1934 (15 U.S.C. 78m), as amendedby this Act, is amended by adding at the end the following newsubsection

Seminar Outline• The Dodd Frank Law• Uniform Appraisal Dataset – UAD

– What is it– Examples– Business process

• Uniform Collateral Data Portal – UCDP– What is it– Registration– Players– Business process

• In-house or Out Source Solutions– Out Source to AMC– In-house considerations

• Questions and Answers

Key Acronyms

• Mortgage Industry Standards Maintenance OrganizationMISMO

• Federal Housing Finance AgencyFHFA• Home Valuation Code of ConductHVCC• Loan Quality InitiativeLQI• Collateral Data DeliveryCDD• Uniform Mortgage Data PortalUMDP• Uniform Appraisal DatasetUAD• Uniform Collateral Data PortalUCDP• Summary Submission ReportSSR

Dodd Frank Law

1. HVCC is now the law2. Codified Appraiser Independence3. Reasonable & Customary fees4. AMC licensing5. No BPO for purchases backed by Government

When is a Period not a Period?

With the new UCDP and UAD screening you are going to have to check EVERY "point" technically a 'period' on the appraisal report before delivering to Fannie Mae. UAD does not use the customary 'period' after abbreviations. So the old adage "you better be crossing your 'Ts' and dotting your "i"s is now "crossing your "Ts" and dropping your periods" That little period is going to get your appraisal rejected and you can not close your loan or deliver the file. Note also that little 'period' comes into play with money also "It makes 'sense' for "NO CENTS" There is no more 'cents' only whole dollars thus that little period is going to get your appraisal rejected i.e. 1234.00 even though 'whole' dollar will get rejected.

Background

• Fannie Mae and Freddie Mac have traditionally only kept the appraised value and appraisal date on a property profile.

• They wanted to capture “all” the data but realized they had to standardize the way appraisal data is reported to do so.

• The UCDP and UAD is the standardization of appraisal data.

• Similar to DU and Loan Prospector

Key Dates

June 2011 December 1, 2011

March 19, 2012

Key Dates (Cont’d)

• Appraisal report forms for all conventional mortgages delivered to the GSEs on or after March 19, 2012, must be submitted to UCDP prior to the delivery date of the mortgage if:

• The loan application is dated on or after December 1, 2011, and

• An appraisal report is required

What is Really Changing

• Forms (similar but slightly different)• PDF Portability (First Generation Required)• Standards in conditions, terms, and “form”

data• Some logistics on how the appraisal is

handled

Forms (*Indicates UAD Forms)

• (Fannie Mae 1004/Freddie Mac Form 70)* Uniform Residential Appraisal Report

• (Fannie Mae 1004C/Freddie Mac Form 70B) Manufactured Home Appraisal Report

• (Fannie Mae 1025/Freddie Mac Form 72) Small Residential Income Property Appraisal Report

• (Fannie Mae 1073/Freddie Mac Form 465)* Individual Condominium Unit Appraisal Report

• (Fannie Mae 1075/Freddie Mac Form 466)* Exterior-Only Individual Condo Unit Appraisal Report

• (Fannie Mae 2055/Freddie Mac Form 2055)* Exterior-Only Inspection Residential Appraisal Report

Forms (Cont’d)

• Fannie Mae Forms Only

• Individual Cooperative Interest Appraisal Report (Fannie Mae Form 2090)

• Exterior-Only Inspection Individual Cooperative Interest Appraisal Report (Fannie Mae Form 2095)

Forms (Cont’d)

Forms (Cont’d)

Forms (Cont’d)

Forms (Cont’d)

Forms (Cont’d)

Forms (Cont’d)

Forms (Cont’d)

What Will Change for Underwriters

• Code Review instead of type review, lots of Acronyms to learn.

• Will have to rely on technology to ensure appraisals are “technically” correct.

• What they are comparing to will be different in the past.

• Will be a “Pass” or “Fail” type submission to UCDP based on the Data Set.

Examples

• Site and AreaAreas less than one acre should be designated in whole numbers only and square feet. For an area greater than an acre, it must be measured in acres and up to two decimals. The unit of measure should be indicated as “sf” or “ac”.

Right: 23569 sf, 1.34 ac :: Wrong: 48,560 sf, 4 acres

Examples

• Date Formats: MM/DD/YYYYUnless otherwise stated, date formats should be entered as MM/DD/YYYY. In the case where only a year format is required, like Tax Year, a 4 digit year is required.

Right: 09/01/2011 :: Wrong: 9/1/2011 or 9/1/11

Examples

• Estimation of years: ~ Must proceed the estimationWhen you can’t provide an exact age or year a property was built through the normal course of business, an estimate is acceptable. However, a tilde (~) has to proceed estimates of age or year built.

Right: ~ 1948, ~ 42 :: Wrong: 1948 (estimate), est. 42

Definitions of condition

• C1 – The improvements have been very recently constructed and have not previously been occupied. The entire structure and all components are new and the dwelling features no physical depreciation.*

• C2 – The improvements feature no deferred maintenance, little or no physical depreciation, and require no repairs. Virtually all building components are new or have been recently repaired, refinished, or rehabilitated. All outdated components and finishes have been updated and/or replaced with components that meet current standards. Dwellings in this category either are almost new or have been recently completely renovated and are similar in condition to new construction.

• C3 – The improvements are well maintained and feature limited physical depreciation due to normal wear and tear. Some components, but not every major building component, may be updated or recently rehabilitated. The structure has been well maintained.

Definitions of condition

• C4 – The improvements feature some minor deferred maintenance and physical deterioration due to normal wear and tear. The dwelling has been adequately maintained and requires only minimal repairs to building components/mechanical systems and cosmetic repairs. All major building components have been adequately maintained and are functionally adequate.

• C5 – The improvements feature obvious deferred maintenance and are in need of some significant repairs. Some building components need repairs, rehabilitation, or updating. The functional utility and overall livability is somewhat diminished due to condition, but the dwelling remains useable and functional as a residence.

• C6 – The improvements have substantial damage or deferred maintenance with deficiencies or defects that are severe enough to affect the safety, soundness, or structural integrity of the improvements. The improvements are in need of substantial repairs and rehabilitation, including many or most major components.

How it matches up

• C1• C2• C3• C4• C5• C6

• New• Renovated• Good• Average• Fair/Poor

A change in thought

Examples

Abbreviation Full Name Fields Where Abbreviation May Appear

Ac Acres Area, Site

AdjPrk Adjacent to Park Location

AdjPwr Adjacent to Power Lines

Location

A Adverse Location & View

ArmLth Arms Length Sale Sales of Financing Concessions

ba Bathrooms (s) Basement & Finished Rooms Below Grade

Br Bedroom Basement & Finished Rooms Below Grade

Cash Cash Sales or Financing Concessions

CtySky City View Skyline View View

CtyStr City Street View View

Accessing UCDP

The 3 Types of UCDP Users:1. Administrator: In order to use the portal, lenders must determine an appropriate administrator. If the lender delivers appraisals to both Freddie and Fannie, then that administrator must be the same for both entities. This person has authority by Freddie Mac and Fannie Mae to manage access of all users as well as submit files, upload corrected files, review reports, and access personal user info.2. Read-Only User: This user is selected by the Admin and focuses on the reporting aspects of the UCDP; ensuring reports are getting through successfully. The Read-Only User has the ability to track the automated reports and access his/her personal profile.3. Lender Agent: The Lender Agent is an entity or user that has been authorized and invited to the UCDP by the Administrator. This is where the appraisal management company (AMC) comes in. If a lender decides to forgo the option to upload the appraisal report themselves, then their Lender Agent (typically their approved AMC) may have direct access to the portal for uploading and re-uploading appraisal reports, as well as evaluating result

Accessing UCDP

Appraisal Submission and Status Updates

Once the Administrator or Lender Agent uploads the appraisal report it will go through a series or checks, including a UAD compliance check as well as an address confirmation review. There are 4 different statuses that can occur after uploading the appraisal file:

1. In Progress: Once the document is uploaded, the administrator will receive an upload confirmation report that will most likely read “In Progress” due to the fact that it may take some time for the UCDP to analyze the data file and render the actual results.

2. Successful: The status will read “Successful” when the UCDP analysis is complete.3. Not Successful: This means the UCDP encountered a fatal error resulting in failure to

process the appraisal data file. The user must override the error, If appropriate, or submit a corrected appraisal data file.

4. Rejected: The most unfortunate of statuses, Rejected means the UCDP cannot nor will it conduct further processing. This can happen for various reasons including the submission of a duplicate file, the file size is too large, or the file format is improper. The user must request and submit the corrected appraisal data file to proceed.

Appraisal Submission and Status Updates

Overrides, From Unsuccessful to SuccessfulWhen “Not Successful” or “Rejected” the status can also be referred to as a Hard Stop. A Hard Stop means that the report is rejected for errors or non-compliance with submission requirements.

There are several options to cure the hard stop, depending on the reason for it as provided by the GSE on the View/Edit page of the UCDP portal. Here are the options:

1) The UCDP automatically approves an override.2) The administrator can manually request an override, if available.3) The Admin obtains and uploads a corrected appraisal data file.

Appraisal Submission and Status Updates

When the override is accepted, the status will change from Not Successful to Successful. If it is denied, then a link will appear requesting re-submission of the file.

In order to confirm delivery acceptance the Administrator must receive a successful status message including a doc file ID number which comes with the Submission Summary Report (aka SSR).

Accessing UCDP

• Either an XML data stream (output from appraisal forms software) with an embedded first-generation PDF file or a first-generation PDF file without the corresponding XML data must be submitted to UCDP

• MISMO 3.0• All XML files must include an

embedded PDF file that includes all appraisal exhibits, addenda, and photographs, including the Fannie Mae Form 1004MC/Freddie Mac Form 71.

Accessing UCDP Cont’d

Lender

Lenders Designa

ted Agent

A lender agent is an entity that a lender authorizes to perform functions within UCDP such as uploading appraisals and

evaluating results.

Cost

• If the appraisal is only available in PDF format, as a convenience to users, a conversion tool will be available in UCDP for a fee (independently offered by Veros Real Estate Solutions – the technology vendor supporting UCDP).

• There will be CLICK fees for submitting a file

Quality Control

• UCDP will go through a series of checks, including a UAD Compliance Check. Appraisals that pass all checks will receive a “Successful” status from UCDP

• All appraisals successfully uploaded to UCDP will receive a Submission Summary Report (SSR) for each GSE submission.

• An appraisal must be submitted to UCDP and receive a “Successful” status on the SSR before the loan is delivered to the GSE.

Registration Facts

Please note if your organization delivers loans to both GSEs, the primary lender administrator must be the same individual for both GSEs. The lender administrator is responsible for: • Establishing access to UCDP for the lender, confirming a

relationship to one or both GSEs, setting up their organization’s profile, and adding additional users.

• Initiating the setup of other lender administrators in the organization for the ongoing maintenance of UCDP access.

• Authorizing lender agents to submit appraisals on behalf of their organization to UCDP.

Final Thoughts

UAD• Accept the changes they have

already made• The train has left the station

Lenders• Solve the submission process UPFRONT

i.e. receive the appraisal in XML, MISMO format from get go

• Run SSR upfront from get go

UCDP• What is the Uniform Collateral Data Portal? • The Uniform Collateral Data Portal (UCDP) is the Web-based portal

lenders and their designated agents use to electronically submit appraisal data files prior to loan delivery to Fannie Mae and/or Freddie Mac (Government Sponsored Enterprises or GSEs). Through UCDP, you can submit up to 10 appraisal data files at a time, search for previously submitted appraisal data files, clear exceptions, and view reports.

• NOTE: The use of UCDP does not relieve lenders of any obligations under the Fannie Mae or Freddie Mac Guides, as applicable, including the representations and warranties they are required to make about the accuracy and sufficiency of appraisals relating to mortgages that are sold to either Freddie Mac or Fannie Mae, including adherence to the Uniform Appraisal Dataset (UAD) standards.

Supported Forms• Form Number Form Title• FNM 1004 / FRE 70 (UAD standard required)• Uniform Residential Appraisal Report• FNM 1004C / FRE 70B• Manufactured Home Appraisal Report• FNM 1025 / FRE 72• Small Residential Income Property Appraisal Report• FNM 1073 / FRE 465 (UAD standard required)• Individual Condominium Unit Appraisal Report• FNM 1075 / FRE 466 (UAD standard required)• Exterior-Only Inspection Individual Condominium Unit Appraisal Report• FNM 2055 / FRE 2055 (UAD standard required)• Exterior-Only Inspection Residential Appraisal Report• FNM 2090• Individual Cooperative Interest Appraisal Report• FNM 2095• Exterior-Only Inspection Individual Cooperative Interest Appraisal Report• Each of the forms includes the FNM 1004MC / FRE 71 - Market Conditions Addendum to the Appraisal

Report.

Signing up

• General users have access to all of the functions described herein (except the ability to change passwords and to invite and/or create users, which is reserved for the Lender Admin). Read-only users can only read information on the screen and do not have a Submit Appraisal option on their Home page.

• When creating a user, the Lender Admin assigns that user a permanent user ID and a temporary password that can be changed after the user logs in. Alternatively, the Lender Admin can send the user an invitation whereby the user can create a unique User ID and password

• Typical change password, accept terms, security questions, click to invite email

Password Rules

UCDP Home Page

Submitting an Appraisal

Submitting think $$$$$

Return

Export Functions

Edit File

Appraisal Finding Page

Reports

Standard Reports

Appraisals Failure Detail Report

Submission Summary Report

• Note Appraiser Identified

Administration Profile

Admin Profile

Links, Tutorials, Webinars

https://www.efanniemae.com/sf/technology/commitloandel/ucdp/index.jsp– UCDP Overview– UCDP FAQs– UCDP Live Web Seminars - Coming Soon in May!– Fannie Mae Monthly UMDP Yardstick

Our Process

Final Thoughts

UAD• Accept the changes they have

already made• The train has left the station

Lenders• Solve the submission process UPFRONT

i.e. receive the appraisal in XML, MISMO format from get go

• Run SSR upfront from get go

Questions?

Q & A

Thank You

Thank you for attending

Coester Appraisal Group7650 Standish Place Suite 107

Derwood, MD 20855www.coesterappraisals.com

888-485-1999