Major Fannie Mae Announcement At Valuation 2009: On July 1, 2010 ALL Real Esate Appraisals To Be Sent CDD format

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Appraisers…….

In previous messages, it has been reported that FannieMae is going to require future appraisal reports be transmitted to them in the MISMO XML format next year. This is a software application running in the ‘background’ when we submit our report to the client, and will be in addition to the normal ‘locked’ PDF we create with our report software.

The article below explains a bit more about the reasoning and process Fannie will do.

Previous info I have read said that MB/LO federal license numbers (starting in 2010) will also be tied to the appraisal report. But there is no mention of that here. This mentions only appraisers. Are we the scapegoats once again?

As reported 11/12/2009 in Valuation Review (free content):

Beginning next year, Fannie Mae will be collecting appraisal reports and mining them for information. The Collateral Data Delivery (CDD) system was announced at (the 2009) Valuation Expo in New Orleans by Sue Potteiger, collateral risk manager at Fannie Mae. “It is part of our long-term commitment to improve the quality of appraisal reports,” she said. “We’re hoping to create transparency here.”

At the present, Fannie Mae doesn’t see appraisal reports as part of a loan file that they collect from the lenders. This will change next year, as the CDD will collect appraisal reports on loans sold to Fannie Mae. The reports will then be mined for four pieces of information: The loan-to-value ratio, the property’s address, the value conclusion and the appraiser’s license number.

The reports will be submitted by the lender, not the appraiser, and will be in the XML format, which is part of Fannie’s new data delivery requirements beginning next year. The reports will be as part of a locked PDF and then sent in a data stream to Fannie Mae, who will then remove the necessary fields and store the information in a database. (This appears to mean the Lender will extract the ‘four pieces of information’ from our reports.)

In the question and answer section of the presentation, Potteiger revealed that the information would also be used for internal metrics, including Fannie’s automated models. She stressed, however, that any data mined from the reports will not be sold and was for internal use only. Although Fannie Mae doesn’t have an exclusionary list of appraisers (unlike its sister company, Freddie Mac), the collection of appraiser licenses could possibly lead to a list being created.

Potteiger also told the audience that Fannie Mae was welcoming any feedback or suggestions from appraisers about the CDD, as the company moves towards greater transparency and a closer understanding of appraisers. (Perhaps she should be asked about the MB/LO license number that relates to the loan, and why that should be a ‘fifth’ piece of information.)

The CDD will use a Web-based portal for accepting the appraisal reports. This is being built by Veros, who won the contract earlier this year.

Dave Towne

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