“Collateral Underwriter” – Fannie Mae’s Appraisal Risk Assessment Tool Rolls Out January 26th- Are you ready?
On January 26, 2015, Fannie Mae is poised to roll out its eagerly awaited Collateral Underwriter (CU) Appraisal Risk Assessment tool. Beginning on that date, users of Fannie Mae’s Uniform Collateral Data Portal (UCDP) will start receiving CU risk scores, red flags and messages in real time when an appraisal report is submitted to the UCDP.
Best of all, the use of CU will be free as Fannie Mae’s stated intent is to assist lenders in identifying potential problem areas based on their analysis of the appraisal report. For a more robust appraisal analysis, CU will be made available to Fannie Mae sellers via a web-based application. However, registration for this more substantive review will be required.
Initially, it is anticipated that underwriters will be contacting appraisers more frequently regarding the CU feedback messages that they will be obtaining in an effort to get better explanations and/or documentation to satisfy Fannie Mae’s appraisal guidelines.
However, the type of issues and/or concerns that will necessitate further attention will become rather apparent over time to both appraisers and underwriters based on the CU feedback messages and risk scores that will be generated. The stated goals of CU are to provide transparency in the appraisal review process as well as to improve the overall quality of the appraisal reports being performed on Fannie Mae loan transactions.
Although appraisers will not have direct access to CU, it is recommended that they visit Fannie Mae’s website in order to obtain basic information on CU and the risk scores, red flags and messages that lenders will be receiving in order to be more prepared for its implementation.
In order for lenders to properly prepare for the implementation of CU, it is highly recommended that they participate in one of the many upcoming Webinars being offered by Fannie Mae in the next two weeks. For details on these Webinars, go to Fannie Mae’s website at www.fanniemae.com.