Secondary & Capital Markets
THE NEXT STEP IN THE JOURNEY TOWARD A MORE EFFICIENT AUTOMATED APPROACH By Andrew Bon Salle, Fannie Mae
listed as 1.5 or 1.1, both meaning a full and a half bath. The Uniform Appraisal Dataset (UAD) standardized appraisal data, and since 2012 Fannie Mae has required digitized appraisal reports. With that foundation, we developed Collateral Underwriter® (CU™). Pairing advanced analytics with a database of more than 23 million appraisals, CU is a powerful appraisal risk assessment tool that we provide free to our lenders. Now there is even more. CU enables Day 1 Certainty in two ways:
UMDP, UAD, UCDP, URLA, UCD … the industry calls these acronyms “alphabet soup” and not with affection. They represent industry-wide efforts to create uniform data standards, and the work to adopt them has been a pain point for lenders. But these efforts also reflect a long-overdue investment in data quality and efficiency. Now, we are beginning to see the return on investment. Thanks to data standardization and uniformity, lenders can get Day 1 Certainty™—freedom from representations and warranties on key loan components plus more speed and simplicity.
1. Lenders receive freedom from representations and warranties on the appraised property value on eligible loans with a CU risk score of 2.5 or lower; about 60 percent of all appraisals submitted to Fannie Mae.
THEN AND NOW A little more than a decade ago, residential appraisal reports were not even digitized, with no standard formats even for simple things like dates. Property condition was described in wildly nonstandard, free-form terms such as “Average New,” “Average Old,” and “Typical.” The number of bathrooms in a property might be
2. Enhanced Property Inspection Waivers (PIWs) provide offers to waive an appraisal on about 20 percent of limited cash-out refinances. Lenders get freedom from representations and warranties on property value, condition, and marketability; borrowers can save the cost of an appraisal; and, a shorter origination process benefits everyone.
The MORTGAGE BANKER Magazine
32
October 2020
