GSEs Pushing UMDP Preparation

Mortgage & Real Estate

Officials from the government-sponsored enterprises continue to encourage lenders to be proactive with their appraisal and origination technology vendors in preparation for the new requirements in the Uniform Mortgage Data Program.

On Sept. 1, Fannie Mae and Freddie Mac required appraisers to begin generating their valuation reports using new forms that comply with the Uniform Appraisal Dataset.

The UAD is an XML file format for the four standard appraisal reports currently required by the GSEs. It also sets a standard for the responses that appraisers can input in the appraisal forms. Together, the UAD sets standards for both the structure of the electronic appraisal forms, as well as the acceptable answers for many points in the appraisal report, like property condition and quality. These data standards are critical to the success of a future GSE initiative: the collection, indexing and databasing of all appraisals of properties that are collateral for GSE-purchased mortgages.

“If you have appraisals and they’re not in the compliant format, that’s not where you want to be,” Marianne Sullivan, Fannie Mae senior vice president of credit portfolio strategy, told the audience during a session at this week’s Mortgage Bankers Association annual convention.

Sullivan said lenders need to identify the business processes they will implement ahead of when the GSEs will begin collecting appraisals; March 19, for loans with application dates on or after Dec. 1.

The delivery mechanism, a technology platform called the Uniform Collateral Data Portal, is already in use on a trial basis for lenders and their appraisal vendors to ensure they work out any issues ahead of the deadline. The GSEs are “already monitoring a very good diversion of observations around property condition and quality,” from the appraisals delivered by the more than 1,000 registered UCDP users, Sullivan said.

The second component of the UMDP is a new XML-based loan data file that will replace Fannie Mae’s 2,000-Character Loan Delivery File and Freddie Mac’s Forms 11 and 13SF. The Uniform Loan Delivery Dataset files collect more information and the data definitions are consistent across both entities.

Unlike the appraisal data, which will be collected by both GSEs with a common portal, Fannie’s Loan Delivery and Freddie’s Selling System portals will remain in place, but with updates to accept the new files.

The UMDP was mandated by the Federal Housing Finance Agency so the GSEs will capture consistent and accurate data, improve loan quality and manage risk better, Sullivan said during her presentation.

Later, Sam Oliver, Freddie Mac vice president of offerings and capabilities, said the focus of the ULDD is on aligning data definitions and standards, but added Fannie and Freddie will maintain separate standards for which data points they collect from lenders.

For example, Fannie Mae will collect pool-level loan data, but Freddie Mac will not. When asked why the UMDP goal of improved risk management doesn’t include the enterprises collecting identical loan data, Oliver said the differences between which data points Fannie and Freddie will collect are “differences in business processes, not a judgment that one is better than the other,” and that the FHFA’s direction on the UMDP are for Fannie and Freddie to align on data standards, but “shouldn’t get into proprietary risk management processes.”

Fannie and Freddie will be rolling out individual training and preparation efforts for the ULDD ahead of the new form’s submission start data: March 19 for loans with application dates on or after Dec. 1. Later this month, Freddie Mac will unveil the new screens designed for the Selling System portal and lenders will be able to start testing their ability to deliver the new file in November. Fannie Mae unveiled ULDD test tools on Oct. 10, which will soon be updated to include additional functionality for manual entry users, Sullivan said.

Daily Briefing | Friday, October 14, 2011

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