BIG CHANGES COMING
AS FREDDIE AND FANNIE IMPLEMENT
UNIFORM MORTGAGE DATA PROGRAM
UAD Compliance PART 2
Two weeks ago, we alerted you to the new Uniform Mortgage Data Program (UMDP) from Freddie Mac and Fannie Mae, which requires you to complete appraisals as per the Uniform Appraisal Dataset (UAD) starting September 1, 2011. With all these new regulatory changes happening, we have been working closely with Fannie Mae and Freddie Mac to ensure these changes can be handled smoothly and as hassle-free as possible - after all, that's what you would expect from ClickFORMS.
With this in mind, we would like to answer some of the questions that we received about the key issues that concern you. Continue to send in your questions to email@example.com. Over the coming months, we will continue to answer your questions and post detailed information about the new UAD requirements to the ClickFORMS NewsDesk. We will also be posting much of this information on the BradfordSoftware.com website. Our goal is to ensure you can create a fully compliant UAD appraisal long before the September 1, deadline.
QUESTION 1: Will the current appraisal forms change as a result of the appraisal data standardization requirements?
No. The forms are not changing. The GSEs are "leveraging" and "re-purposing" existing fields to include new standardized responses or in some cases, more data points. The actual forms that will be affected by the Uniform Data Appraisal (UAD) will require you to follow data standards laid out by the UAD Specification. This includes very specific instruction on which fields are required vs. optional and how and where certain information will be recorded on the forms. Bradford Technologies has been working closely with the GSE to integrate these new requirements into the ClickFORMS software.
QUESTION 2: Will there be changes in the way information is entered and printed on the forms?
Yes. Because UAD is very specific about how information is entered in a field (its order, abbreviations, how data is separated, etc), the way you enter it will have to change. The new requirements incorporate standardized field responses, allow for multiple data points in certain fields, and apply constraints on how the data in the forms is to be printed as defined in the UAD Specification.
QUESTION 3: Will ClickFORMS be able to switch between non-GSE and GSE compliant appraisal reporting formats?
Yes. We are building the UAD Compliance as an add-on module so you can switch between the two modes with the click of a button. We are working very hard to continue the "hassle-free" interface you currently enjoy regardless if it's a UAD compliant appraisal or a non UAD compliant one.
QUESTION 4: What is the impact of UAD on my productivity? Has the time to produce an appraisal report increased with these additional requirements?
We have not performed any time studies at this point. However, we are working hard to minimize the disruption the compliance changes are going to cause to your current workflow and productivity.
QUESTION 5: Are all fields required to be completed on the appraisal forms?
All fields necessary to comply with all GSE, client-specific and USPAP requirements must be completed. Certain fields may be required on some reports and not on others depending on the nature of the assignment and the type of the property. Some fields require a standardized response whereas others can be left blank or can be filled in the usual manner. We have integrated the GSE requirements (UAD and UCDP) so that you are will able to complete a UAD compliant appraisal report. ClickFORMS will guide you through each of the fields and will determine when a field is required or conditionally required.
QUESTION 6: How many fields are affected by the new requirements?
The new requirements translate into 209 required or conditionally required data points on the URAR for instance (91 required, 118 conditionally required).We are building in new modules into ClickFORMS to ensure you correctly comply with the 118 conditionally required data points and of course, the 91 required ones. We will be reviewing all these changes and requirements in future UAD Compliance updates.
QUESTION 7: What additional information must be provided on the appraisal forms?
New information needs to be provided on the form that was never explicitly requested before. For instance, the name of the AMC is now required. Information about the bathrooms and kitchen is now required. Sale type for the subject property and each comparable property is now required. As we mentioned, there are some major changes coming, new information is just part of it. We will be reviewing each of these individually in the coming months with you.
QUESTION 8: What is a "Conditionally Required" data point?
A "Conditionally Required" (CR) data point is one that must be included in the appraisal XML file when a defined business condition exists. In English, it means that you need to supply the information. The parameters that govern the conditionally of the data point are specified and will be programmed into ClickFORMS so as you complete the appraisal report, the software will ensure you are completing it in a compliant fashion.
QUESTION 9: May fields be left blank if the data is not available or applicable?
There are fields that may be left blank and it is up to the appraiser to prepare a report as accurately and completely as possible. This does not change from what you have been currently doing when you produce an appraisal report.
QUESTION 10: Does the UAD standardize or limit the information and/or data that appraisers can include in the addenda of the report?
The UAD does not standardize the data contained in the addenda.So, the appraiser can add comments, explanations or any narrative in the addenda to produce a concise, clear appraisal report.
QUESTION 11: Is "Free Text" annotations or any text entered in the "gray space" acceptable?
No. The UAD specifications were very clear on standardizing just data that can be entered in the pre-defined fields of the appraisal forms. Text in the "gray areas" or annotations will not be recognized and picked up in the XML. However, for non-GSE appraisals, you can continue to use Free Text and fields within the gray areas.
QUESTION 12: The standardized Condition and Quality ratings (Q1...Q6; C1...C6) that we previously reviewed do not fit every residential property in my market area. How should the field be completed if a property does not fit exclusively into one condition or quality rating?
The GSEs will only allow specific quality and condition ratings (Q1-Q6, C1-C1) and hence an appraiser will have to choose the category that most closely fits. If you find it necessary to comment further on the Quality or Condition selection, you may elaborate further in the comment addendum of the appraisal report.
QUESTION 13: How will the borrower or consumer understand the new Condition and Quality ratings?
We will be creating a new addendum "Definition of Terms Reference" which you can include with every appraisal report. This addendum will have the definitions for all the abbreviations and ratings used in the data of the appraisal.
QUESTION 14: Some intended users and readers of appraisal reports may not fully understand some of the standardized responses or abbreviations mandated by the UAD. Will appraisal reports that are UAD compliant be USPAP compliant?
Yes, UAD compliant appraisers must still be USPAP compliant. Remember, USPAP does not prescribe a specific wording, but rather a methodology and standards which would be acceptable to other appraisers handling a specific property. Fundamentally, appraisers remain responsible for ensuring compliance with USPAP requirements. This is where our development will help you meet the USPAP clarity requirements. As mentioned above, we are developing addenda that can be referenced within the report to clarify abbreviated terms. Additionally, preferences can be set to automatically insert definition or explanations when certain standardized responses are selected.
QUESTION 15: What is an example of appraisal data that is being standardized?
There are two primary data standardization changes.The first is straight forward: Numbers need to be numbers; Dates need to be dates; Dollar amounts need to be dollar amounts. The second type is standardization of responses. This is for better and easier comparison between properties. A good example of the latter is the property characteristics of condition and quality. This has been standardized to C1...C6 and Q1...Q6. The good news is that we are putting a lot of effort to make it easy for you to comply with these new standardization requirements.
QUESTION 16: The UAD requires that the USPS standardized mailing address be included in the appraisal report. How will ClickFORMS accommodate this?
ClickFORMS will include the USPS standardized mailing address of the property in the addendum. To guarantee you compliance with UAD, Bradford Technologies has invested in the official USPS mailing addresses of all properties in the US and will check your property with the USPS mailing address database every time you create a report.If the address is different than the USPS mailing address, you can display this information in the addendum (GSE recommendation).
QUESTION 17: If the site size of the subject property and some of the comparables are less than one acre, and the site size of other comparables is greater than one acre, will the appraiser be required to report the subject property and the comparable sales that are less than one acre in square feet, and the comparable sales with site sizes greater than 1 acre, in acres, or can the appraiser choose to report the site size of all of the properties using the same unit of measure?
The UAD requires the site size for all properties that are less than one acre to be reported in square feet and the site size of all properties that are one acre or greater be reported in acres. ClickFORMS will have build-in intelligence to recognize when a property is more than an acre, and report it in acres. So, when inputting anything larger than 43,560 square feet, ClickFORMS will automatically translate it in acre (43,560 square feet = 1 acre).
QUESTION 18: Does the UAD standardize the 1004MC Market Conditions Addendum?
No. The data in the 1004MC form is not standardized.
QUESTION 19: What forms are standardized in the current UAD specifications?
Only data on four of the main appraisal forms have been standardized. They are:
Uniform Residential Appraisal Report 1004
Exterior-Only Inspection Residential Appraisal
Individual Condominium Unit Appraisal Report
Exterior-Only Inspection Individual Condominium
QUESTION 20: What about other forms, are they going to be standardized?
At this time, Fannie/Freddie are only requesting standardization of the URAR and Condo forms listed above. At one time the other main forms were going to be standardized, so we expect that the other forms will be standardized in the future.
QUESTION 21: Are the Quality ratings (Q1 - Q6) consistent with other industry standards?
The quality ratings were designed exclusively by Fannie Mae and Freddie Mac. There is no intentional or unintentional correlation to other rankings used in other industries.
QUESTION 22: With so many fields being standardized (such as Condition and Quality ratings) is there any requirement or purpose of providing a narrative description anymore?
Yes. Your appraisal report is still required to comply with GES guidelines and USPAP reporting requirements regardless of the new UAD requirements. For example, each of the quality or condition ratings can further be described by an appraiser on why/how this specific rating was selected. This is where our extra development work to make it "hassle-free" to comply with UAD will come into play. When you select one of the ratings, you will also have the option to automatically place the rating definition in the comment addendum so as to comply with USPAP to produce clear understandable reports for the intended user.
QUESTION 23: is Bradford Technologies going to offer training sessions on how to use the new ClickFORMS' UAD modules to create compliant appraisal reports?
Yes. Bradford Technologies will be offering customer training/instruction on how to create UAD compliant appraisals. Look for training options to be available in the April time frame.
QUESTION 24: Where can I get more information?
QUESTION 25: Since Fannie and Freddie are being reorganized, what is the probability of UAD being mandated by September 1, 2011?
Until we hear otherwise directly from Fannie Mae and/or Freddie Mac, we will be continuing our development of UAD Compliance module for ClickFORMS.
QUESTION 26: I have more questions. Where do I send them to get answers?
Send your questions to firstname.lastname@example.org
We answer all emails. And we may post your question in a future UAD Compliance Article.Go to Top