CoesterVMA a nationwide appraisal Management company offers UCDP and UAD Compliance for mortgage lenders. Learn what the portal requires as well as what as a lender need to to do to become compliant with the new legislation.
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UAD and UCDP Compliance Webinar - Coester Appraisal Management Company
GSEs New Appraisal Programs Uniform Appraisal Dataset – UADUniform Collateral Data Portal - UCDPPresented by: Brian Coester and Jeff Jurin
Seminar Overview Uniform Appraisal Dataset – UAD • What is it • Examples • Business processUniform Collateral Data Portal – UCDP • What is it • Registration • Players • Business process In-House or Outsource Solutions • Out Source to AMC • In-house considerations Questions and Answers
When is a Period not a Period?With the new UCDP and UAD screening you aregoing to have to check EVERY "point" (orpunctuation period‘) on the appraisal report beforethe final delivery to Fannie Mae.The UAD does not use the customary period afterabbreviations. So the old adage: "you must crossyour ‘t’s and dotting your ’i’s’” is now "cross your‘t’s’ and drop your periods."
When is a Period not a Period?That little period is going to get your appraisalrejected and you will not be able to close your loanor deliver the file.Note: That little period comes into play whenrecording dollar amounts. There is no more centsonly whole dollar amounts allowed in “price” fields.Therefore, that little period is going to get yourappraisal rejected. To remember this rule, think "Itmakes sense for ‘NO CENTS’.”
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
Changes over the past year HVCC is Codified Reasonable No BPO on abolished Appraisal & AMC UCDP And purchases Independence and now with Dodd- Customary licensing backed by UADDodd-Frank Frank and AIR fees Government
Key Acronyms • Mortgage Industry Standards MaintenanceMISMO Organization FHFA • Federal Housing Finance Agency LQI • Loan Quality Initiative CDD • Collateral Data DeliveryUMDP • Uniform Mortgage Data Portal UAD • Uniform Appraisal DatasetUCDP • Uniform Collateral Data Portal SSR • Summary Submission Report
Key DatesSeptember December 1, 2011 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)Uniform Residential Appraisal Report• (Fannie Mae 1004/Freddie Mac Form 70)*Manufactured Home Appraisal Report• (Fannie Mae 1004C/Freddie Mac Form 70B)Small Residential Income Property Appraisal Report• (Fannie Mae 1025/Freddie Mac Form 72)Individual Condominium Unit Appraisal Report• (Fannie Mae 1073/Freddie Mac Form 465)*Exterior-Only Individual Condo Unit Appraisal Report• (Fannie Mae 1075/Freddie Mac Form 466)*Exterior-Only Inspection Residential Appraisal Report• (Fannie Mae 2055/Freddie Mac Form 2055)*
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 inwhole numbers only and square feet. For an areagreater than an acre, it must be measured in acresand up to two decimals. The unit of measure shouldbe 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 beentered as MM/DD/YYYY. In the case where only ayear format is required, like Tax Year, a 4 digit year isrequired.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 propertywas built through the normal course of business, anestimate is acceptable. However, a tilde (~) has toproceed estimates of age or year built.Right: ~ 1948, ~ 42 :: Wrong: 1948 (estimate), est. 42
Key AbbreviationsAbbreviation Full Name Fields Where Abbreviation May AppearAc Acres Area, SiteAdjPrk Adjacent to Park LocationAdjPwr Adjacent to Power Location LinesA Adverse Location & ViewArmLth Arms Length Sale Sales of Financing Concessionsba Bathrooms (s) Basement & Finished Rooms Below GradeBr Bedroom Basement & Finished Rooms Below GradeCash Cash Sales or Financing ConcessionsCtySky City View Skyline View ViewCtyStr City Street View View
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.
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.
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.
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
Accessing UCDP Cont’d Lenders Lender Designated AgentA lender agent is an entity that a lender authorizes to perform functions within UCDP such as uploading appraisals and evaluating results.
Registration FactsPlease note if your organization delivers loans to bothGSEs, the primary lender administrator must be the sameindividual for both GSEs. The lender administrator isresponsible 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.
Accessing UCDPThe 3 Types of UCDP Users:1. Administrator: In order to use the portal, lenders must determine an appropriate administrator. If the lenderdelivers appraisals to both Freddie and Fannie, then that administrator must be the same for both entities. This personhas authority by Freddie Mac and Fannie Mae to manage access of all users as well as submit files, upload correctedfiles, 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; ensuringreports are getting through successfully. The Read-Only User has the ability to track the automated reports and accesshis/her personal profile.3. Lender Agent: The Lender Agent is an entity or user that has been authorized and invited to the UCDP by theAdministrator. This is where the appraisal management company (AMC) comes in. If a lender decides to forgo theoption to upload the appraisal report themselves, then their Lender Agent (typically their approved AMC) may havedirect access to the portal for uploading and re-uploading appraisal reports, as well as evaluating result
Appraisal Submission and Status UpdatesOnce the Administrator or Lender Agent uploads the appraisal report it will gothrough a series of checks, including a UAD compliance check as well as an addressconfirmation review. There are 4 different statuses that can occur after uploadingthe 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.
Fannie Mae, Oct. 18 UpdateThe UCDP includes a UAD Compliance Checkthat currently results in warning messages onlyand does not affect the successful submission ofappraisals to the UCDP. Receiving UADCompliance Check warning messages inconnection with a “Successful” status in theUCDP does not automatically render theappraisal report unacceptable
Appraisal Submission and Status UpdatesOverrides, From Unsuccessful to SuccessfulWhen “Not Successful” or “Rejected” the status can also be referred toas a Hard Stop. A Hard Stop means that the report is rejected for errorsor non-compliance with submission requirements.There are several options to cure the hard stop, depending on thereason for it as provided by the GSE on the View/Edit page of theUCDP 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 mustreceive a successful status message including a doc file ID number which comes with the Submission Summary Report (aka SSR).
SSR - Storage• SSR will have to be stored in the loan file with the entire package.• If you ever intend to sell the loan the SSR should be received before closing.• Some LOS will have the ability to store the file.• This is the “golden ticket” for the appraisal
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
Outsourcing• Some AMC’s will be ready for the UCDP and UAD Changes, most will not.• Trust but verify, they can not use a “manual review” for this without charging much more.• Want to know their “automated” review rules.• If they have their own software you need to know where they are getting their UCDP software reader from. (not doing it themselves)• Your going to set them up as a “Lender Agent”• Work out logistics of handling these files with them upfront.• They should handle the UCDP submission and revisions until the file receives an SSR.• You want a back up just in case they drop the ball or get overwhelmed by this process.
In-House• Vero’s - $4.50 per file to convert from PDF to MISMO XML, you would upload the file form their.• Mercury Network – Has ability to check the appraisers file if the appraiser uses alamode and embed the XML, you would upload from their.• Will have to rely on appraisers to have a UAD Checker in their software.• Will have to have underwriters manually check every file to ensure UCDP and UAD Compliance.• Feedback reports will become your best friend.• Will be a DU or Loan Prospector type function “pre closing”
Company History PAST PRESENT • National Service Provider providing• Founded in 1970 by Timothy valuation services in US, Puerto Rico D. Coester. and Caribbean.• Was trained and mentored by • Leading Provider of Appraisals, industry legends David Lenhoff BPO’s, Reviews and Repurchase and Donald Boucher both Rebuttals. former President’s of the • First to introduce industry smart Appraisal Institute. phone application and salesforce.com cloud based• Highly Respected consulting platform style valuations.
Overview of Products and Services• Residential and Commercial • Appraisal Management Valuations Service• Broker Price Opinion’s – Compliant with Dodd-• Automated Valuation Model Frank and industry (AVM) regulations• Loan Repurchase Rebuttals – Licensed as AMC in for Credit and Appraisal applicable states Related – UCDP Review and• Due Diligence on loan pools Delivery• REO Valuation’s
Account Management• All accounts are managed are assigned to a dedicated account manager.• Order desk which assigns, collects payment and ensure order is placed with proper appraiser .• Account Managers the manage the file from receipt to final completion and are dedicated by client.• Quality Control department handles all QC requests and does reviews, reconsiderations and revisions.• We have a team of specialist on staff and under contact to at a moment notice can handle almost every issue.
Quality Control ProcessInitial Error Review – Vendor Upload•UAD Error Review and USPAP 1,600 Point Auto Review•Automated Check for Basic Information ErrorsManual Review For Quality – Staff Appraiser•Staff appraiser reviews report line by line to ensure quality.•Focus on comments, adjustments, sales info and lender comments.Supplemental Info Review – AVM’s, MLS•Reviewer pulls sales, listings, MLS data or runs AVM to verify value.•Detailed notes are taken and submitted with the appraisal report to the client.Guarantee of Value – Appraisal Inspector•Additional Licensed staff or fee appraiser contacted to review file•Information pulled to confirm then appraisal is conditioned before submission•Not required for every file