BIG CHANGES COMING
AS FREDDIE AND FANNIE IMPLEMENT
UNIFORM MORTGAGE DATA PROGRAM
UAD Compliance PART 1
As many of you know the minimum requirements for appraisals used in the loan process will be changing to meet the new Uniform Mortgage Data Program implemented by Fannie Mae and Freddie Mac. Over the course of the next several months, we will be reviewing these changes with you so that by the time they are required, you'll be able to handle the new requirements with ease.
We have been working jointly with Fannie Mae and Freddie Mac since early last year when this program was first initiated. The program has gone through many refinements since then with the final specs being published last December after a number of delays.
Since December, our engineers have been working overtime to make sure these new requirements and the way you comply with them are implemented in a smooth, hassle-free manner that you have come to expect from ClickFORMS.
As you would expect, the biggest changes are to the data that you gather and how you enter it on the forms. There is more data to gather; it's now standardized; there are rules on how its placed on the form; how its abbreviated (because in some cases it must be abbreviated); and how different pieces of data are separated (i.e. with semi-colons) within a field.
There are also changes to the meaning of data collected. For instance, in the sales grid Condition and Quality were always entered relative to the subject. This is no longer the case. In fact, Condition is now a ranking of C1,C2, C3...to C6 and Quality is a ranking of Q1, Q2, Q3...to Q6 and they are relative to the properties themselves - not the subject. More on this later.
The dates to keep in mind are the following:
September 1, 2011: This is the important date for appraisers. All appraisers must be able to complete the appropriate appraisal forms as required by the Uniform Appraisal Dataset (UAD).
This means that by September 1st (and probably sooner in some cases) you must be able to submit appraisals that are UAD compliant. We expect that your friendly AMC clients will start to put pressure on you to comply much sooner than September 1.
December 1, 2011: Lenders must collect the new Uniform Loan Data Delivery (ULDD) data points required for the first phase of implementation, as well as the UAD standardized appraisal data for new loan applications. Lenders must submit an electronic appraisal report form before delivery to Fannie/Freddie if the loan application date is on or after December 1, 2011.
Since there is usually a 90 day lag between when a loan is initiated and when it gets to Fannie or Freddie, this ensures that all loans initiated on or after September 1 will be compliant with UAD and ULDD requirements allowing the lender to submit the electronic version and be in compliance.
What We're Doing to Help You Navigate the Changes Safely
Over the coming months we will be describing the changes in detail and what they mean to you. AMCs will also be undergoing some major changes in the process. We'll explain those changes to you as well and how you can deal with these process changes in the most efficient manner.
ClickFORMS is also undergoing major changes. As we get further into the development, we'll publish a schedule so you will know when to expect the new UAD compliant versions. We also will have live training sessions and webinars to go over the changes with you. Our goal is to minimize the disruption these new requirements will have on your productivity.
We will be posting all the UAD updates on the ClickFORMS NewsDesk, so be on the lookout for these. We will also publish update links in ClickTALK to pages on our website for the latest information.
PART 1: New UAD Condition and Quality Rankings
To get you introduced to some of the new changes, we'll start with the new Condition and Quality rankings. These are the rankings that you will use when specifying the state of a property's condition and quality.
Quality Ratings and Definitions
Dwellings with this quality rating are usually unique structures that are individually designed by an architect for a specified user. Such residences typically are constructed from detailed architectural plans and specifications and feature an exceptionally high level of workmanship and exceptionally high-grade materials throughout the interior and exterior of the structure. The design features exceptionally high-quality exterior refinements and ornamentation, and exceptionally high-quality interior refinements. The workmanship, materials, and finishes throughout the dwelling are of exceptionally high quality.
Dwellings with this quality rating are often custom designed for construction on an individual property owner's site. However, dwellings in this quality grade are also found in high-quality tract developments featuring residences constructed from individual plans or from highly modified or upgraded plans. The design features detailed, highquality exterior ornamentation, high-quality interior refinements, and detail. The workmanship, materials, and finishes, throughout the dwelling are generally of high or very high quality.
Dwellings with this quality rating are residences of higher quality built from individual or readily available designer plans in above-standard residential tract developments or on an individual property owner's site. The design includes significant exterior ornamentation and interiors that are well finished. The workmanship exceeds acceptable standards and many materials and finishes throughout the dwelling have been upgraded from "stock" standards.
Dwellings with this quality rating meet or exceed the requirements of applicable building codes. Standard or modified standard building plans are utilized and the design includes adequate fenestration and some exterior ornamentation and interior refinements. Materials, workmanship, finish, and equipment are of stock or builder grade and may feature some upgrades.
Dwellings with this quality rating feature economy of construction and basic functionality as main considerations. Such dwellings feature a plain design using readily available or basic floor plans featuring minimal fenestration and basic finishes with minimal exterior ornamentation and limited interior detail. These dwellings meet minimum building codes and are constructed with inexpensive, stock materials with limited refinements and upgrades.
Dwellings with this quality rating are of basic quality and lower cost; some may not be suitable for year-round occupancy. Such dwellings are often built with simple plans or without plans, often utilizing the lowest quality building materials. Such dwellings are often built or expanded by persons who are professionally unskilled or possess only minimal construction skills. Electrical, plumbing, and other mechanical systems and equipment may be minimal or non-existent. Older dwellings may feature one or more substandard or non-conforming additions to the original structure.
Condition Ratings and Definitions
The improvements have been very recently constructed and have not previously been occupied. The entire structure and all components are new and the dwelling features no physical depreciation.*
*Note: Newly constructed improvements that feature recycled materials and/or components can be considered new dwellings provided that the dwelling is placed on a 100% new foundation and the recycled materials and the recycled components have been rehabilitated/re-manufactured into like-new condition. Recently constructed improvements that have not been previously occupied are not considered "new" if they have any significant physical depreciation (i.e., newly constructed dwellings that have been vacant for an extended period of time without adequate maintenance or upkeep).
The improvements feature no deferred maintenance, little or no physical depreciation, and require no repairs. Virtually all building components are new or have been recently repaired, refinished, or rehabilitated. All outdated components and finishes have been updated and/or replaced with components that meet current standards. Dwellings
in this category either are almost new or have been recently completely renovated and are similar in condition to new construction.
The improvements are well maintained and feature limited physical depreciation due to normal wear and tear. Some components, but not every major building component, may be updated or recently rehabilitated. The structure has been well maintained.
The improvements feature some minor deferred maintenance and physical deterioration due to normal wear and tear. The dwelling has been adequately maintained and requires only minimal repairs to building components/mechanical systems and cosmetic repairs. All major building components have been adequately maintained and are functionally adequate.
The improvements feature obvious deferred maintenance and are in need of some significant repairs. Some building components need repairs, rehabilitation, or updating. The functional utility and overall livability is somewhat diminished due to condition, but the dwelling remains useable and functional as a residence.
The improvements have substantial damage or deferred maintenance with deficiencies or defects that are severe enough to affect the safety, soundness, or structural integrity of the improvements. The improvements are in need of substantial repairs and rehabilitation, including many or most major components.
TEST: Try assigning these rankings to the subject and comps on your next appraisal assignment.
Comments / Questions
That's probably enough information over load for one session. If you have questions or comments, email them to UAD@bradfordsoftware.com. We will answer your questions in Part 2 of the UAD information series.Go to Top