A couple of weeks ago, I learned about a new Fannie Mae program that was rolled out to lenders called Collateral Underwriter, or CU. From the press release:
Fannie Mae created the online tool in 2013 to analyze appraisal data it had been receiving from lenders electronically since 2012. With the rollout in early 2015, mortgage lenders will have access to the same information that Fannie Mae uses to evaluate property appraisals. It will enable lenders to review appraisals and address issues before delivering the loans to Fannie Mae.
It’s got the appraiser community in an uproar:
Only a few days into the release of the Fannie MaeCollateral Underwriter and my prediction of this being the biggest process change in the appraisal industry since the HVCC is becoming a reality for the field appraiser.
Appraisers and lenders are flabbergasted about what to do with the recent findings and feedback that CU has provided regarding appraisers’ work.
The appraisal community blogs and forums are packed full of questions regarding how to handle CU and how to properly defend appraisal reports as well as who’s responsible for review this information.
Fannie Mae’s guidance that the lenders are responsible for reviewing and interpreting the CU findings has turned into some lenders sending all the findings to the appraiser to comment on with no interpretation or guidance.
Granted, the program is new, there’s a lot of confusion, and a lot of unknowns. But while the industry’s been obsessed with Zillow and drones and such, something like Collateral Underwriter is likely to impact the real estate agent on the ground far more than any of those things. If you’re in the industry, I think it’s worthwhile to at least learn about it at a high level. Let me get the conversation started.
I’d like to thank Rick Lifferth, Founder and CEO of Data Master and a still-active appraiser with 40+ years of experience, and Bill Garber, Director of Government and External Relations for the Appraisal Institute, for taking the time to educate me on the topic as best as they could. Any errors or mistakes in this post are because I’m a poor student, not because they haven’t tried.