Fannie’s new Collateral Underwriter to check appraisals Using Fannie’s Big Data.
Another great email from Dave Towne in Washington!!
10-14 FNMA Collateral Underwriter Flyer showing info about the FNMA Collateral Underwriter process they will make available to lenders (NOT APPRAISERS) in January 2015. You should review it. It has to do with their Enhancement of Risk Controls.
This is what we know as Appraisal Quality Monitoring (AQM) …. which was announced almost 2 years ago. FNMA has already been using the ‘scope’ on your reports, but will soon allow the lenders to have access to the software so that they can do pre-submittal exams prior to uploading the loan file, and your appraisal, to FNMA.
Virtually everything is digital now in our real estate appraisal world. That makes it incredibly easy for ‘big data’ to be analyzed very quickly and efficiently. Hiding relevant property info under a rock, your clipboard [tablet?], or just ignoring it, is no longer possible. Discrepancies will be found fast, and you will be asked for explanations or corrections.
Note the examples from the flyer:
– Chain of property ownership
– Inconsistency in reported property data from your info compared to your peers (subject & comps)
– Checking adjustments made (or not made) – primarily the math
– Testing for comps in terms of location, characteristics, sales prices, etc.
FNMA’s news release about their Collateral Underwriter:
Introducing Collateral Underwriter
Collateral Underwriter™ (CU™) is a proprietary appraisal risk assessment application developed by Fannie Mae to support proactive management of appraisal quality. CU will:
– Provide additional transparency and certainty by giving lenders access to the same appraisal analytics used in Fannie Mae’s quality control process.
– Perform an automated risk assessment of appraisals submitted to the Uniform
– Collateral Data Portal® (UCDP®) and return a CU risk score, flags, and messages to the submitting lender.
– Be available at no charge so lenders can take full advantage of the application for quality control and risk management purposes.
The CU risk scores, flags, and messages will be available to all UCDP users in real-time beginning on Jan. 26, 2015 through UCDP. Find more information on the CU web page at https://www.fanniemae.com/singlefamily/collateral-underwriter?cmpid=sln102114 .
Dave Towne, AGA, MAA Owner / Educator
360-708-1196
towneappraisals@clearwire.net
www.towneappraisals.com
Mount Vernon, WA
My comments: The PDF only has three pages of the document. The other pages were not available. Real estate is location, location, location. What about the 4th approach to value: Curbside Approach. That is where you sit on the curb across the street from the subject and ask yourself: “Does this value make any sense?”
There are many appraisal review programs in use and being developed. I knew that Fannie would be using their Big Data to automate underwriting reviews of appraisals as well as monitoring appraisers.
Does this mean appraisers focus even more on making sure their appraisals pass these automated reviews rather than focusing on what counts – the value? Is this another path along the way to not focusing on what appraisers provide – reliable and accurate values? Plus, disclosure of any problems with the property?
CU appears to be a “Mass Appraisal” regression model, no longer an “Art Form” they want a world of averages, medians and equalization. Isn’t that how most tax assessments model the valuations? And we all know how accurate they can be! Good grief!
I personally believe it’s just another step in the direction of eliminating appraisers as we know them. If this data is so awesome and can be used to correct or question an appraisal, then what purpose is the appraiser to begin with. With all of the satellite photos, bing maps, google street views, county aerial maps, what good is the appraiser? This data already has what they call com parables that should have been used against a given property. Think about it. If these new programs actually direct the appraiser in how to assemble the report and which data to use, isn’t the next step simply having the lender plug in a property address and the computer spits out a value???? Its coming fellow appraisers.
Does this mean appraisers focus even more on making sure their appraisals pass these automated reviews rather than focusing on what counts – the value? Is this another path along the way to not focusing on what appraisers provide – reliable and accurate values? Plus, disclosure of any problems with the property?
Mis-direction leads to a Biased report from external influences, clearly in Focus with USPAP. We are being led down a path of mathematics and will be missing the Art Form required of the work.
If fannie made this available to appraisers. we could check the appraisal before submitting and address any issues in the report prior to submitting it. This would reduce the revision requests that come in a month after the appraisal was submitted.
I totally agree. If this Big Data is so effective, why don’t they open this up as a comparable database to appraisers to supplement MLS. I would love to list FNMA Database as one of my sources.
I think that we should take the time to give them what they want. We should raise our fees to cover the time involved; and, of course cut back the number of appraisals we do in a week. As the backlog increases fannie will have to lighten up a little. But that would mean appraisers would have to agree that we will no longer work for next to nothing. I’m sure that this suggestion violates some anti-trust law.