Collateral Underwriter Overview to Understanding CU Risk Scores, Flags and Messages Presented by Natalie Thompson, VP of Quality Assurance Residential Dept. & Tracey Yarbrough, VP of Special Projects and Systems
CU Collateral Underwriter also known as CU, is a new proprietary appraisal risk assessment application developed by Fannie Mae to support proactive management of appraisal quality Database comprised of conventional loans delivered to the GSEs through UCDP on or after March 19, 2012 with application dates on or after December 1, 2011 from UAD standardized property data Fannie reports over 14 million appraisals and over 20 million comps have been collected with approximately 20,000 uploaded each day Typically the GSEs are seeing the same comp 5 times
CU Timeframe Monday January 26, 2015 New CU appraisal risk scores, flags and messages 21 Proprietary messages are changing from warnings to hard stops Relate to the most critical eligibility violations Hard stops require action Manual Override Submission of a corrected appraisal The list of Hard Stops can be found on Fannie s website VMG will submit to UCDP prior to asking for any revisions to the report VMG has been clearing messages, so our panel is already familiar with the process Originally the GSEs graded based on submissions but now they are only concerned with the last submission
CU Forms While nothing will change regarding which forms are required to be UAD and uploaded, only the 1004 and 1073 forms uploaded to the UCDP in UAD format will be analyzed for Risk. CU is able to score approximately 97% of appraisals submitted nationwide by using geocode. Fannie recognizes that in rural areas it may be necessary to select sales from a greater distance and/or from older dates CU will not provide a high h risk score solely l based on further distance, older dates and higher adjustments. Appraisals will be analyzed on resubmission, but depending on the revision the risk score, flags and messages may or may not change. Fannie is looking for substantial material differences; they have tolerances built in.
CU & UAD Fields Currently, CU does not analyze all fields but will use the data below from subject and comps: Sales price Lot size Above grade bathroom count Above grade bedroom count Age Below grade area Finished basement area Location Location rating View View rating Quality Condition GLA Total bedroom count Total bathroom count Total living area
CU & Appraisers Appraisers need to understand how the model works Fannie Mae has several recorded webinars, FAQs and a dedicated webpage Appraisers will not have access to CU. VMG will have access to the SSRs that will provide the risk score, risk flags and messages, but only Lenders will have access to detailed information and sales map in the web-based CU application Documentation is key If an Appraiser considered a sale and did not use it for a comp, most likely the model will recognize that sale, as well. VMG suggests that Appraisers go ahead and document it, so if it does come back, Appraisers will not have to readdress
CU Tips Consistency is key Adjustments will be compared to self and peers If not supported be ready for questions If you are not using a comps database, start now Double check for Typos Don t take it personally Fannie had only been reviewing the loans after they were closed, which could be attributed to the mortgage crisis in the late 2000s. By being proactive more issues can be identified upfront. Fannie s goal is not to create more work for the Appraiser, but for Lenders to be able to ask more informed questions
CU Risk CU is a risk too; it is not an issuance for an approval or denial. CU is not a sole decision factor for purchase. High risk appraisals may have a greater opportunity to be pulled for post-processing audits. Fannie Mae will continue to purchase loans regardless of risk score. Lenders are still responsible for due diligence and should continue to adhere to their review policies. CU does not provide an estimate of value.
CU Resource Links CU Website www.fanniemae.com/singlefamily/collateral-underwriter CU Training, i Introduction ti + Risk Score, Flags, & Messages http://fanniemae.articulate-online.com/contentregistration.aspx?documentid=592074fd-9a70-439f-80ff-71bfb7cf5063&cust=77787&returnurl=/p/7778797335 http://fanniemae.articulate-online.com/contentregistration.aspx?documentid=fb6e69ad-7930-4af8-8978-6a09fd8dfe46&cust=77787&returnurl=/p/7778798708 8978 46&C 77787&R t /7778798708 CU FAQ https://www.fanniemae.com/content/faq/collateral-underwriter-faqs.pdf CU Hard-Stop Messaging List https://www.fanniemae.com/content/release_notes/ucdp-change-notification-01262015.pdf VMG Website www.valuationmanagementgroup.com/ VMG Blog www.valuationmanagementgroup.com/press-room/
Additional CU Resource Links FannieMae Customer Interaction Center Hotline Please call 1-877-722-6757 the Hotline is available Monday through Friday from 8:00 a.m. to 8:00 p.m., Eastern Time (ET). FreeAppraisalReview.com offered by Platinum Data Solutions https://freeappraisalreview.com/home.html
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