Kelly L. Zitlow

Major Overhaul on Appraisal Reporting Forms

The government-sponsored enterprises (GSE's), Fannie Mae & Freddie Mac, at the direction of the Federal Housing Finance Agency (FHFA) have released a new appraisal format known as UAD. The Uniform Appraisal Dataset took effect September 1^st, and must be used on all appraisals for Arizona mortgages.  To improve the quality and consistency of appraisal data on all loans delivered to Fannie Mae, Freddie Mac & FHA, the UAD "defines all fields required for an appraisal submission for specific appraisal forms and standardizes definitions and responses for a key subset of fields."

Generally speaking, the new UAD format will "clean up" appraisals so they are more consistent across the board thus helping us in our Arizona market where we deal with short sales and foreclosures.  All appraisers will be required to use the same abbreviations and standardized text.  For example, appraisers will be inputting a "code" for the condition of the property, not just stating "average" or "below average."

I reached out to our local Arizona appraisal expert, Mark Norris at Norris Property Consultants to get his perspective on the impact this will have on the Arizona real estate market. In a nut shell he said this change is expected to cause delays as appraisals may take longer to complete and review for several reasons:

• There will be a learning curve with the new software ~ appraisers will need to get used to using it and it will take time
• The new software may have glitches and issues as it was designed in a matter of months ~ the old software was refined over 20+ years
• The UAD requires more keystrokes to complete the report ~ each report will take longer to complete.
• Processors and Underwriters reviewing the reports will need to learn the new codes ~ another learning curve which will take additional time

The only constant today is change and this is just a new twist in the rapidly changing Arizona mortgage lending industry. I know many of you review appraisals so don't be shocked when you first see the new format and can't understand what you're reading. J  Just give me a call and I'll be happy to help you digest the new report.

Enjoy the long holiday weekend and don't put that sunscreen away just yet!

~ Kelly

Quote of the week:  The greater danger for most of us lies not in setting our aim too high and falling short, but in setting our aim to low, and achieving our mark.  Success is the ability to go from one failure to another with no loss of enthusiasm. ~ Winston Churchill

First Posted 9/18/2011