FHFA, GSEs Unveil Uniform Mortgage Data Program

Yesterday, the Federal Housing Finance Agency (FHFA) announced a new initiative by the government sponsored enterprises (GSE) Fannie Mae and Freddie Mac.  The Uniform Mortgage Data Program is a joint effort to create uniform data standards and collection processes.  According to an overview, the program will also create efficiency, strengthen risk management for the GSEs, and improve transparency.

Two of the three components will impact the appraisal industry.  A Uniform Appraisal Dataset is being developed by the GSEs that “standardizes key appraisal data elements to enhance data quality and promote consistency.”  The dataset will standardize data definitions for key subsets of fields on the uniform residential appraisal report.  The Uniform Appraisal Dataset and requirements will be published by the GSEs in September.  Appraisal reports will be required to use the dataset by January 1, 2011.

The Uniform Collateral Data Portal is being developed “for the electronic collection of appraisal data to minimize impact on lenders.”  While standardization will occur the GSEs will each have additional requirements for their appraisal data.  The Portal will be available in October.  By April 1, 2011, lenders will be required to deliver appraisal data through the Portal for loans with application dates on or after January 1, 2011.

A list of FAQs is available here and here.

  1. Greg Barnum

    Another Realtor in my office secured a $95K contract on a nicely rehabbed condo.

    FHA appraiser used all foreclosures as comps, took none of the improvements into account, probably never went inside, and came up with a value of $59K which, because it is FHA, stays with the property for 120 days. Seller can not get more than $59K for 4 months, needs to sell, owes $87K, so will probably walk away, ruining her good credit with a foreclosure.

    The appraisal was lazy and incompetent, but there is no recourse. If he valued the condo at $5K, what would happen? Not much. As long as he errs on the low side, he would get paid for his “work” and move on to screw someone else, get paid again and move on to screw yet another Seller. Because he gets his assignements from a referral company that doesn’t know or care about the quality of his work, he answers to nobody.

    This is a recipe for a new wave of foreclures. It also threatens the entire real estate industry as it renders futile many good faith efforts of Realtors to produce market-driven arm’s-greg.barnum@metrobrokers.comlength transactions. With appraisal practices like this, there is no market.

    Transparency–a worthy enough goal–has unfortunately morphed into unaccountability.