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December 11, 2013   CLOSE

Fannie Mae Addresses Appraisal Quality, UCDP Notification
Fannie Mae addressed appraisal quality, appraiser selection requirements, data quality issues and new processes to identify and monitor individual appraisers in a Dec. 10 letter to lenders. Additionally, Fannie issued a Uniform Collateral Data Portal change notification with new messaging to support its appraiser monitoring processes.

In the letter, Fannie Mae reported that its weekly review of appraisals submitted through UCDP has identified instances where lenders have delivered loans supported by appraisals that were completed by an appraiser whose license or certification had been suspended or revoked.

To assist lenders in identifying potential appraiser license or certification issues, Fannie said that the UCDP will continue to issue warning messages — messages that do not trigger a rejection of the appraisal submission — that will require lenders to confirm the validity of the appraiser licensing information and ensure compliance with Fannie Mae’s policies described in the Selling Guide, B4-1.1-03, Appraiser Selection. Failure to comply with appraiser licensing requirements will result in a repurchase request.

The letter also reminded lenders that Fannie reviews appraisal reports for patterns of discrepancies and inconsistencies related to property characteristics such as gross living area, sales price, room count and lot size, as well as condition, quality, view and location ratings. Fannie reported that it can identify instances when the same appraiser has provided inaccurate, inconsistent or contradictory information on the same property and same transaction across multiple appraisals.

Fannie also announced several new processes to provide information to lenders and appraisers regarding the quality of appraisals submitted through the UCDP.

Fannie said it will provide information directly to appraisers whose reports exhibit a pattern of minor inconsistencies, inaccuracies or data anomalies in order to give them the opportunity to improve their work. Future appraisal reports from those appraisers will be monitored to assess improvement.

Another process being developed will identify appraisers whose reports exhibit more egregious issues. In those cases, Fannie said it will contact the appraiser and the lender that delivered the loan informing them that it will either perform a post-purchase review all loans submitted with appraisals from the identified appraiser or reject all loans with appraisals completed by the specific appraiser.

All approved sellers and servicers will receive access to the list of appraisers whose appraisals are subject to full review or whose appraisals are no longer accepted by Fannie Mae. The list will be available to approved sellers and servicers on or before Jan. 6, 2014. Details on how to access the Appraiser Quality Monitoring list, which will be protected content on Fannie Mae’s website, will be provided on Fannie’s business portal and in communications to approved sellers and servicers.

In conjunction with the new processes, Fannie said it will add new proprietary messages in UCDP to notify lenders about actions regarding appraisals from specific appraisers. The messages, effective Dec. 10, 2013, will indicate either that 100 percent of the loans submitted with appraisals from the identified appraiser will be reviewed or that Fannie Mae will no longer accept appraisals from the identified appraiser.

Read the Fannie Mae lender letter.

See the UCDP change notification.

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