An initiative underway at the government-sponsored enterprises will forever change how lenders and appraisers handle the appraisal process. But the Uniform Mortgage Data Program has faced repeated delays, creating uncertainty in how, and when, this industry paradigm shift will take place.
The UMDP is a Federal Housing Finance Agency-mandated initiative to standardize and automate mortgage data for loans and related documents delivered to Fannie and Freddie. The program includes a new technology platform for electronic appraisal data delivery, called the Uniform Collateral Data Portal, and set standards for mortgage and appraisal data delivery, called the Uniform Loan Delivery Dataset and the Uniform Appraisal Dataset, respectively.
With the UCDP, users will submit appraisal data either with a Web browser interface or through integrations with appraisal management and loan origination technology.
The ultimate responsibility for submitting appraisals to the UCPD is on the lenders. They have the relationships with the GSEs, explained Darius Bozorgi, CEO of Santa Ana, Calif.-based Veros, the technology vendor selected by the GSEs to build the UCDP.
“A lot of people mistakenly believe that this is just a lender issue,” he said. “It’s an industry issue that affects anybody that touches appraisals.”
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Once the UCDP is live, appraisers can begin using the system. Barring further delays, mandatory electronic appraisal delivery to the UCDP will be required for all mortgages with application dates on or after Dec. 1 and delivery dates on or after March 19, 2012.
“We’re trying to manage the waters around Dodd-Frank and state regulations on how AMCs are being regulated,” said Jim Kirchmeyer, CEO of Buffalo, N.Y.-based appraisal management company Kirchmeyer and Associates and property data and analytics firm Real Info. “A delay is fine with us.”
The GSEs say the delay is in response to backlash over the original Sept. 1 deadline.
“The dates were driven by the industry, not by the GSEs,” Bozorgi said. “It’s the lender community and their related stakeholders that came back and said ‘if you want us to do all these, this is how much time we need.’ To their credit, they listened.”
But even if industry participants met the UMDP with open arms, the initiative would still not operational because the UCDP is still in development, months behind schedule.
Bozorgi blamed the delay on the GSEs’ creation of the UAD, which he said was added to the initiative after the initial deadlines were set, extending the time needed to launch the UCDP. Representatives from Fannie Mae and Freddie Mac did not respond to requests for comment prior to press time. (
The UAD points are a comprehensive list of items included in four widely used appraisal documents, with extensible markup language, or XML, tagging to facilitate transfer from lenders and appraisers to the GSEs. Representatives from Veros and the GSEs are both active participants in the Mortgage Industry Standards Maintenance Organization property and valuation services workgroup—the nonprofit that creates standards for XML tags used in mortgage technology.
Despite this extensive effort through MISMO, the GSEs decided to establish the UAD on their own, building a dataset that expands from the current valuation workgroup’s standards, called Version 2.6, with additional points the GSEs will require lenders and their appraisals to submit. The MISMO definitions are like a dictionary of terms and corresponding XML tags. With the UAD, the GSEs essentially created new words not in the Version 2.6 dictionary—what Bozorgi described as “MISMO 2.6-plus.”
The new terms created in the UAD will eventually have definitions in the MISMO universe. But Kirchmeyer questions the timing of the UAD and why MISMO wasn’t involved more in the process.
“You could say they are undermining MISMO, or you could look at it as they’ve taken what they’ve built so far—and they’ve done a ton of work so far—and added to it,” he said.
“I don’t know why they’re not just bringing the MISMO workgroup in and work together on the UCDP project,” he added. “It seems like MISMO is being pushed aside to run this program.”
The benefits of the UMDP are the standard format of mortgage data and the ability to mine it for statistical and analytical purposes. It’s unclear what the GSEs will do with the data they collect, but Kirchmeyer said the GSEs shouldn’t keep it to themselves, nor should they use it to create a valuation technology to compete with private vendors.
