With appraisers now generating valuation reports in the new data and format standards set by the government-sponsored enterprises, lenders are adopting new procedures and practices ahead of full implementation of Fannie Mae and Freddie Mac's Uniform Mortgage Data Program.
One issue is how lenders will read appraisal files. Appraisers have traditionally provided lenders with PDFs of their appraisal reports, which let lenders read the appraisals, but limits their ability to tamper with the information. But the new GSE requirement that lenders must submit full electronic appraisal reports is encouraging appraisers to provide reports in the GSE-specified XML file format, called the Uniform Appraisal Dataset. The new XML files enable the GSEs to organize the appraisal information into a database, but are more difficult for lenders to read.
Oklahoma City-based a la mode recently released a free XML reader designed specifically to access the embedded PDF in the UAD-specific XML file.
While a la mode is a provider of appraisal form-filling software, the company's UAD Reader works with any file created in the GSEs' standard, regardless of which forms software was used. With it, lenders can read the appraisal in a split screen presentation that shows the PDF and corresponding XML. Lenders can also run an error check that highlights the specific parts of the report that have an issue.
Another function lets lenders share PDFs of appraisals with borrowers, complete with a guide that explains the definitions and terms used in the report. The UAD Reader also serves as a delivery mechanism to submit the XML file to the GSEs' new data platform, the Uniform Collateral Data Portal.
The UAD is an XML file format for the four standard appraisal reports currently required by the GSEs. It also sets a standard for the responses that appraisers can input in the appraisal forms. Together, the UAD sets standards for both the structure of the electronic appraisal forms, as well as the acceptable answers for many points in the appraisal report, like property condition and quality.
These data standards are critical to the success of a future GSE initiative: the collection, indexing and databasing of all appraisals of properties that are collateral for GSE-purchased mortgages. The UCDP is already in use on a trial basis for lenders and their appraisal vendors to ensure they work out any issues ahead of the deadline.
