UAD Regulations for URAR Appraisal Reports

Overview

As of September 1st, 2011, appraisers were required to make significant changes in the way they prepare the URAR appraisal report because Fannie Mae, Freddie Mac, FHA, and the VA are now requiring all appraisal reports be transmitted electronically in a standardized format. All URAR appraisal reports with an effective date on or after the first of September have to meet the new Uniform Appraisal Dataset (UAD) standards (and at some future date, for the FHA and VA as well).

Introduction

Under the direction of the Federal Housing Finance Agency (FHFA), Fannie Mae and Freddie Mac (the GSEs or Government Sponsored Enterprises) have developed the Uniform Mortgage Data Program (UMDP) to enhance the accuracy and quality of loan data delivered to each GSE. The Uniform Appraisal Dataset (UAD) is a key component of the UMDP which defines all fields required for an appraisal submission for specific appraisal forms and standardizes definitions and responses for a key subset of fields.

With the UAD, the GSEs will require that appraisals be completed with standardized responses in certain appraisal form fields. The standardization of certain data points will support consistent appraisal reporting, regardless of geographic location of the property or any localized reporting conventions, by addressing vague or disparate data currently included on some appraisal reports.

The UAD standardized response requirements include:

  • Standardized formats for fields that include dates, currency, and other values
  • Allowable values from a list of choices provided for certain fields
  • Standardized abbreviations to allow more information to fit on the printed appraisal forms
  • Standardized ratings and definitions for the "Condition," and "Quality," of the property and Updated/Remodeled" status

The UAD supports improved quality and accuracy of the appraisal data while preserving each GSE's ability to determine what the data means to loan performance and loan quality. The GSEs will each continue to exercise independent business judgment in evaluating and maintaining business terms, credit policies, and analytics. Differences in the assessment and use of the appraisal data will remain due to unique and separate business policies, mortgage products, and processes.

Uniform Data Portal

While all the GSEs began requiring information sent to them be delivered using the new UAD requirements as of September 1st, 2011, beginning on December 1st, 2011 the delivery of all loan information will be required to be submitted through a Uniform Collateral Data Portal (UCDP) which is a part of the Uniform Mortgage Data Program, or UMDP. UCDP is designed to standardize the data being delivered to the GSEs which will allow them to run specific metrics on the loan information to determine if they are worth purchasing.

Recommendation

In order to familiarize themselves with the new UAD standards appraisers should consider obtaining training material or instructional course work that presents a field-by-field explanation and example of the Uniform Appraisal Dataset with emphasis on:

  • UAD Required Fields
  • UAD Conditionally Required
  • UAD Requirements
  • UAD Instructions and Explanations

Appraisers will need to be able to identify and utilize field-specific standardization requirements for completing the GSEs' uniform residential appraisal report forms (the appraisal forms) and be able to navigate the fields on the appraisal forms. These changes are intended to provide specific instructions for lender underwriting and quality assurance staff to facilitate their review of residential appraisal reports for compliance with the GSE data standard. These requirements are in addition to either or both GSEs' appraisal-related policies and guidelines, which are subject to change and identified in the Fannie Mae's Selling Guide and Freddie Mac's Seller/Servicer Guide. Conforming to the UAD is in addition to, and does not replace, appraisers' development and reporting responsibilities as required by theUniform Standards of Professional Appraisal Practice (USPAP).

Technical specifications are available on the GSE websites for the UAD for lenders who are parsing the appraisal data in their internal systems for workflow and other purposes.

Written and Published by: VanEd



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