DOES YOUR AMC HAVE YOU COVERED? What the new CU requirements entail What to expect from your AMC How your AMC can help mitigate risk How to eliminate ...
DOES YOUR AMC HAVE YOU COVERED? What the new CU requirements entail What to expect from your AMC How your AMC can help mitigate risk How to eliminate risk flags before UCDP submission Q&A
What is Collateral Underwriter? FANNIE MAE’S CU Will be implemented January 26, 2015 to identify appraisals with heightened risk of property eligibility, compliance violations, overvaluation and appraisal quality issues. 21 proprietary messages become hard stops that require either appraisal updates or a documented manual override. 112 new CU proprietary appraisal warning messages. CU Risk Score and risk flags. Key Components: Reconciliation Adjustments Comp Selection Data Integrity www.streetlinks.com @streetlinks | #SLwebinars
How will CU Effect Your Business?
CU’s new hard stops, risk scores and warning messages could have a significant impact upon your current underwriting procedures AND your interactions with your appraisal providers. SO, HOW DO YOU ENSURE YOU’RE COVERED?
AMC Best Practices PLACING CONTROLS WITH YOUR AMC Your AMC’s number one job is to ensure that your UCDP submissions remain successful!
UCDP REPORTING When it comes to CU, your AMC’s UCDP reporting process should cover:
AMC RESPONSIBILITY Your AMC should be prepared to handle:
Top five messages. AMC response. Should they have cleared these without additional appraisal information? Qualification of the staff clearing UCDP stipulations.
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Comprehensive QC including all possible messages and UCDP rules. Model-based and data accuracy rules (after submission to portal). Any specific messages you believe the AMC should manually override. Any specific messages that require escalation to you.
AMC Best Practices SAMPLE MESSAGE that your AMC should be able to clear before sending the appraisal to you: Hard Stop Code
Message Text
FNM0084
There was no comment on market conditions, even though one or more negative housing trends were indicated (declining, over supply, over 6 months).
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AMC Best Practices SAMPLE MESSAGE that your AMC would send to you to research: Hard Stop Code
Message Text
FNM0174
The project name suggests that the property may be a condo hotel. Verify the subject is located in a project that meets Fannie Mae’s Selling Guide requirements.
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AMC Best Practices UCDP DELIVERY OPTIONS Which of the following seems MOST EFFICIENT?
PROCESS 1 Appraiser sends report to AMC AMC runs quality control checks AMC sends report to UCDP AMC receives UCDP findings (Successful) Successful or Unsuccessful UCDP Submission (Unsuccessful) AMC sends report back to appraiser Appraiser sends report to AMC AMC runs more quality control AMC sends report to UCDP AMC receives UCDP findings (Successful) AMC delivers appraisal, SSR to client
AMC CLIENT X ? X X X X X X X
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X
AMC Best Practices UCDP DELIVERY OPTIONS Which of the following seems MOST EFFICIENT?
PROCESS 2 Appraiser sends report to AMC AMC runs quality control checks AMC delivers appraisal report to client Client sends report to UCDP Client receives UCDP findings (Successful) Successful or Unsuccessful UCDP Submission (Unsuccessful) Client sends report back to AMC AMC sends report back to appraiser Appraiser sends report to AMC AMC runs more quality control AMC delivers appraisal report to client Client sends report to UCDP Client receives UCDP findings (Successful) Successful or Unsuccessful UCDP Submission
AMC CLIENT X ?
X X X
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X X X X
X X X
AMC Best Practices UCDP DELIVERY OPTIONS Which of these is most efficient for YOU?
PROCESS 1 Best for lenders who prefer a more hands-off experience or little involvement in the appraisal process.
PROCESS 2 Best for lenders who prefer a more hands-on experience or to take on more of their appraisal process themselves.
NOTE: AMCs will NOT have access to the CU web interface. If you choose PROCESS 1, your AMC will need to notify and get direction from you on appraisals that trigger certain warning messages.
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AMC Best Practices
COMPLIANCE: UCDP MESSAGES AND APPRAISERS Maintain objectivity of appraisal process. Statistical outlier – appraiser in minority may not be incorrect. Review appraisal for pre-existing narrative, which may explain differences. Market Trends: Not necessarily looking for agreement with SSR or CU findings, just specific local market segment data supporting appraiser’s assertions. Comprehensive statistical analysis is imperative.
Attribute Characterization:
View and/or location – Data is KING! Quality and/or condition – Are there objective or subjective differences?
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CU Risk Scoring APPRAISERS CANNOT mitigate every item signaling that there may be elevated risk associated with a property.
PROPERTY ELIGIBILITY ISSUES Appraiser identifies that property is atypical or non-conforming. Site size, GLA, functional utility, style, use, construction, etc. Any significant feature that cannot be bracketed and/or appraiser has identified as atypical.
APPRAISAL CONSTRUCT ISSUES Have already been addressed by the appraiser. Comps are distant, old and/or dissimilar in rural market (but best available). Large adjustments needed to non-homogenous real estate market. May need to obtain a second appraisal product to augment support or collateral valuation.
