Understanding the Uniform Mortgage Data Program (UMDP) Updates Prepared for: NAFCU 2011 Fannie Mae 1
What is the Uniform Mortgage Data Program? Fannie Mae and Freddie Mac are working together to implement uniform appraisal and other loan delivery data standards, at the direction of the Federal Housing Finance Agency The Uniform Mortgage Data Program (UMDP) includes the following: Uniform Loan Delivery Dataset, which includes all of the loan data points that will be required at loan delivery Uniform Appraisal Dataset, which includes all fields required for a complete appraisal, as well as standardized definitions and responses for a key subset of fields Uniform Collateral Data Portal is the single portal for the electronic submission of appraisal data to the GSEs 2
Uniform Appraisal Dataset 3
The Current State of Appraisal Data Data standards not consistently applied across the industry The GSEs do not currently collect the majority of detailed appraisal data in electronic form The majority of appraisal data provided is not machine-readable Which Causes Data Quality and Consistency Issues Numbers and dates are written in a variety of formats Taxes written sometimes in dollars, sometimes in percent Inconsistent terminology is used for identical descriptions Waterfront vs. Ocean Front Inconsistent description framework (apples to oranges) Answers in the Quality of Construction field can range from Good or Average to Brick or Vinyl A speak no evil approach to describing properties Good and Average appear frequently in the Condition field, but Fair and Poor almost never appear 4
What Is the Uniform Appraisal Dataset? The Uniform Appraisal Dataset includes: All fields on four supported appraisal report forms Standardized definitions and responses for a key subset of fields on the forms Existing appraisal report forms are not changing Leveraging existing fields within the current forms Some fields are being repurposed and/or expanded Leverages MISMO 2.6 as the reference model with proprietary GSE extensions 5
Examples of Changes to Data Entry on the Existing Forms Field Old New Address Abbreviations and format varied Must conform to USPS standards Subject Offering Dates and Prices Requirement implied for completeness Now required to comply with standard Sale Type Free form with many variations Drop-down list with specific choices View from Property Free form with many variations Drop-down list with specific choices Condition of Property Free form with great inconsistency Specific rating from C1 to C6 Quality of Construction Free form Specific rating from Q1 to Q6 6
Field-Specific Standardization Requirements The GSEs provide business requirements and instructions in Field- Specific Standardization Requirements for certain appraisal form fields The use of the UAD provides a new level of consistent reporting, regardless of geographic location of the property or any localized conventions. It is important to note that these standards are in addition to existing reporting requirements already published in either or both GSEs appraisal-related policies and guidelines.* *Conforming to the UAD does not relieve appraisers of their development and reporting responsibilities as required by the Uniform Standards of Professional Appraisal Practice (USPAP). 7
Key Dates for the Uniform Appraisal Dataset For appraisals with effective dates (date of inspection is the effective date of the appraisal) on or after September 1, 2011, the following appraisal report forms must be completed using the UAD: Uniform Residential Appraisal Report (Fannie Mae 1004/Freddie Mac 70) Individual Condo Unit Appraisal Report (Fannie Mae 1073/Freddie Mac 465) Exterior-Only Inspection Condo Unit Report (Fannie Mae 1075/Freddie Mac 466) Exterior-Only Inspection Residential Appraisal Report (Fannie Mae 2055/Freddie Mac 2055 exterior only) Note: September 1, 2011, is a new date, which the GSEs announced on December 16. 8
Getting Started Talk to your appraisal providers and determine their plans and timeframes for delivering appraisals with standardized data to you For September 1, will they continue to send you the appraisal form in the same method as today i.e., PDF or paper form? When will they be able to begin sending you the electronic appraisal data file and in what format (i.e., MISMO, ACI, AI Ready, etc)? Talk to your technical team to discuss whether you have a storage facility for the appraisal data Determine whether you currently collect any of the standardized appraisal data fields in your own loan origination or appraisal systems today If yes, talk to your technical team to discuss any needed system enhancements to accommodate the new standardized data 9
Getting Started Determine what teams in your organization will need training on the new data standards Determine what appraisal providers or appraisal industry entities are planning on offering training Attend future Fannie Mae Online Customer Seminars (OCS) webinars Access an online recorded tutorial (sponsored jointly by the GSEs) Consider developing a train-the-trainer in-house program Call your Fannie Mae Technology Account Manager for implementation assistance Support available to lenders and appraisers via UAD_questions@fanniemae.com 10
Uniform Collateral Data Portal 11
UCDP Basics Appraisal report forms for all conventional mortgage loans delivered to Fannie Mae or Freddie Mac on or after March 19, 2012, must be submitted to UCDP if: Loan application is dated on or after December 1, 2011, and An appraisal report is required Lenders must submit electronic appraisals for all loans requiring an appraisal: Residential and condo forms (1004, 2055, 1073, and 1075) UAD forms MH, 2-4 unit, and co-op forms (1004c, 1025, 2090, and 2095) Lenders and/or their designated agents may access the portal through: An easy-to-use web-based interface Vendor-provided solutions (vendor list available in 2011 - first quarter) Direct system-to-system integration Appraisals must be submitted before delivery of the mortgage loan to Fannie Mae or Freddie Mac, and must include all exhibits, addenda, and photographs. 12
UAD/UCDP Process Flow Completes appraisal in UAD format Sends completed appraisal in PDF/XML format to Lender or AMC Note: Appraisal Forms Software to be updated by Vendors beginning in 2Q 2011 Lender Uploads final QCed appraisal to the UCDP and clears all exceptions Upload details coming soon Note: Lenders are still responsible for all existing appraisal reporting requirements regarding the mortgaged property Delivers Doc File ID in the selling system/loan delivery Doc File ID is part of the ULDD Specification Provides the Doc File ID and Submission Status UCDP details coming soon 13
UCDP Submission Results UCDP will return either a Successful or Not Successful status when the submission is completed. Appraisal submissions that receive fatal errors that cannot be resolved by requesting an override or submitting a corrected appraisal will receive a Not Successful status. In the future, Fannie Mae and Freddie Mac results could be different for the same submission, based on GSE-specific rules and analytics. UCDP will generate a single Doc File ID plus one Submission Summary Report for each GSE to which the appraisal was submitted. Fannie Mae Loan Delivery will check for a Doc File ID with a successful status at the time of loan delivery. The Submission Summary Report provides a summary of the submission and the status Search functionality and standard reports will be available to track and manage submissions. 14
UCDP Appraisal Processing and Edits Basic appraisal data checks: Property Value Valid property address Valid appraisal license Valid file size Presence of an embedded.pdf file Users may request an override for some, but not all, errors and indicate why they believe an appraisal submission is valid. The property address check will be auto-overridden for properties in Puerto Rico, the Virgin Islands, and Guam. The valid appraiser license check will continue to be auto-overridden; however, Fannie Mae may conduct a post-purchase review and contact the lender regarding appraiser licensing. UAD Compliance Check reviews appraisal submissions against certain UAD data requirements and UAD specifications. One overall successful or unsuccessful edit response, with detailed results of all UAD field checks that had issues. All failures will result in a warning for the initial UCDP release; some or all checks will move from warning to fatal in the future. Additional GSE-specific checks and messaging may be implemented in the future. 15
UCDP Appraisal Data Requirements XML appraisal report with an embedded first-generation PDF for all loans to be delivered to Fannie Mae, if an appraisal is required. Residential and condo forms (1004*, 2055*, 1073*, and 1075*) MH, 2-4 units, and co-op forms (1004c, 1025, 2090, and 2095) Appraisal formats supported: MISMO 2.6 with GSE extensions for UAD forms / MISMO 2.6 for non- UAD forms (preferred format) ACI AI-Ready First-Generation PDF As a lender convenience, UCDP will offer a tool to convert firstgeneration PDFs in acceptable formats to the MISMO XML format for an additional fee. * These forms must be completed in compliance with the UAD data and technical requirements. 16
Appraisal Forms Software Vendor Update Forms vendors are in the process of updating their software with the UAD requirements We will work closely with the forms vendors to ensure their software is UAD-compliant and acceptable for upload to UCDP Forms vendors will offer training to their customers (primarily appraisers) to help with the transition to the UAD The GSEs will also offer training and job aids for lenders and appraisers, and appraiser industry groups as requested 17
Getting Started Talk to your appraisal providers and determine their plans and timeframes for delivering electronic appraisal data to you and in what format Talk to your technical team to discuss whether you have a storage facility for the appraisal data Talk to your loan origination, appraisal management, and/or appraisal software providers to help you determine options for UCDP access Direct submission of appraisal data to the UCDP portal Integration from loan origination or appraisal management systems for direct submission Submission by a third-party agent (i.e., AMC) Begin thinking about your appraisal ordering and loan origination processes to determine at what point in your process to submit the appraisal Common options include at appraisal receipt, appraisal review and underwriting, during loan underwriting Approaches may differ by business channel 18
Getting Started (cont d) Determine your GSE appraisal submission strategy Get your technical team involved to determine how they will capture the Doc File ID and Success Indicator and move them into delivery Determine your error handling and resolution process Third-party agents (i.e., AMCs) may be able to handle the submission and error handling process for your organization Think about needed system and process controls such as Not allowing a loan status change until success status is cleared (i.e., clear to close, to delivery, etc) Forcing a resubmission prior to closing to ensure the latest appraisal is uploaded Passing the Success Indicator to delivery along with the Doc File ID Attend future OCS webinars for implementation and training sessions Call your Fannie Mae Technology Account Manager (TAM) for implementation assistance 19
Uniform Loan Delivery Dataset 20
What is the Uniform Loan Delivery Dataset? Identifies all of the data points that Freddie Mac and Fannie Mae will require at loan delivery, based on various loan types, certain business conditions, or GSE-specific requirements. Leverages the industry-standard MISMO version 3.0 reference model Adoption of the ULDD using the MISMO version 3.0 reference model will help improve data accuracy, simplify the exchange of data, and increase confidence that loan data delivered to the GSEs is complete and accurate. 21
ULDD: Phase I Requirements We reduced the number of data points that will be required in initial implementation of the ULDD from what was originally announced. The data required in Phase I include: MISMO data points that map to the GSEs combined existing datasets Approximately 50 additional data points most critical for improved loan quality and investor processing Data points required to form the MISMO XML transaction Deferred and additional data will be required in future phases. 22
GSE-Specific Implementation Guides The two separate GSE-Specific Implementation Guides for Loan Delivery Data provide the specific enumerations and implementation requirements that are informed by our unique business policies and processes. The GSE-Specific Implementation Guides for Loan Delivery Data define: the investor-specific data points required; accepted enumerations; and how the data points are mapped from the legacy formats It is important to note that lenders must continue to meet the terms and conditions of their individual contracts with the GSEs. 23
Key ULDD Dates Loans with application dates on or after December 1, 2011 that are delivered on or after March 19, 2012 must meet the ULDD requirements Lenders must collect the ULDD data points for loans with application dates on or after December 1, 2011 Lenders must deliver the ULDD data points using the MISMO XML file format for loans delivered to either GSE on or after March 19, 2012 The GSEs will retire their existing loan delivery file formats on March 19, 2012 Freddie Mac Forms 11 and 13SF Fannie Mae 2000-Character Loan Delivery File Format 24
Loan Delivery Data Requirements: December 1, 2011 March 19, 2012 Loan Applications December 1, 2011 Loan Deliveries March 19, 2012 Requirement Before Before May be delivered under the existing requirements of the respective GSEs using Freddie Mac Forms 11/13SF for loans sold to Freddie Mac or Fannie Mae s 2000- Character Loan Delivery File Format for loans sold to Fannie Mae. Before On or after Must be delivered in an XML file, but only need to be delivered with the MISMO data point equivalents for the data required on Freddie Mac Forms 11/13SF for loans sold to Freddie Mac or Fannie Mae s 2000-Character Loan Delivery File Format for loans sold to Fannie Mae. On or after Before May be delivered under the existing requirements of the respective GSEs using Freddie Mac Forms 11/13SF for loans sold to Freddie Mac or Fannie Mae s 2000- Character Loan Delivery File Format for loans sold to Fannie Mae. On or after On or after Must be delivered in an XML file with the complete revised set of required MISMO data points. 25
Getting Started ULDD Data Point Considerations Identify new fields and determine if they exist in your loan delivery system If yes, validate field formats and enumerations against specs If not in delivery system, check other systems (LOS, Secondary MKT, etc.) and determine if source data is collected there. If yes, determine how to get data in the MISMO file in the appropriate format. (file format and enumerations) If data is not collected, talk to your systems providers regarding having the data added and where Refer to column M (Fannie Mae Implementation notes) for additional guidance on field descriptions and usage Identify any current 2000-Character Loan Delivery format field values that may have a different enumerated value (Review the enumerations tab in Appendix D) Identify fields that have differences in Fannie Mae and Freddie Mac enumerations and ensure that systems can accommodate these differences Identify Freddie Mac legacy fields that are optional to Fannie Mae and determine whether to include in the MISMO file (if easier to do so) Note: There are some 2000-character fields that are not required in the MISMO file. 26
Getting Started ULDD Other Considerations If you use a vendor to create the current 2000-Character Loan Delivery File Format, contact them to understand their MISMO delivery file development timelines If you enter data directly into Fannie Mae s Loan Delivery system, attend future OCS webinars to learn how to enter data in the updated GUI Develop a test plan and timeframes that support your MISMO production date Check with your account team if you have any questions about how the terms in your Master Agreement might be affected by ULDD requirements Call your Fannie Mae Technology Account Manager for implementation assistance 27
Summary of UMDP Timeline Changes 28
Summary of UMDP Timelines Creating a holistic approach for data collection and delivery Starting September 1, 2011: All appraisers must use the new appraisal dataset for appraisal reports Starting December 1, 2011: Lenders must collect the new ULDD data points, as well as the standardized appraisal data for new loan applications Starting March 19, 2012: All GSE deliveries must be in XML format and, if the loan application date is after December 1, 2011, the delivery must include the new ULDD data points and the appraisal data must be submitted to UCDP Requirements Timeline (above) is identical for Freddie Mac and Fannie Mae. ULDD testing and initial implementation dates may differ for Fannie Mae and Freddie Mac. 29
The Critical Role of Technology Vendors Technology vendors are critical to the success of the UMDP the ULDD, UCDP and the UAD Communication: Talk with your lender customers; make sure they understand the steps they need to take to integrate their systems with your software Testing: Ensure that your systems are well tested for integration with your lenders systems, and ultimately, integration with the GSEs systems Each GSE will be providing testing information for lenders and vendors Stay Informed: Visit the GSEs websites regularly for new and updated resources and training opportunities 30