Realtors, do you know...... (agent, foreclosure, closing, loan)

[SmartMoney]

About the UCDP appraisal score? Before going into this further, a 30 second recollection:

Dodd/Frank created CFPB, who created the Closing Disclosure, which required everyone's data (license #'s, contact info and so on). Also, included, was the Uniform Collection Data Portal for appraisals. So, for the past 8 years Fannie and Freddie have been collecting appraisal data on every transaction. Lenders use of the risk score is not mandatory, but every UW I have talked to over the years utilizes the score. When the UW reviews the appraisal there is a risk score from 1 to 5. If the score is 2.5 or less, Fannie/Freddie requires no further review of the report, the lender may accept the report unconditionally. Above 2.5, the lender must review/underwrite the appraisal. When you get to a 4 or 5, the lender is advised to take a closer look. When we get such a report with a 4 or higher, we pull an AVM or a desk or field review, or even a secnd report, at our expense. It depends on the report, and here, the credit side of the transaction becomes important.

When are you likely to see a 4 or 5? New construction, areas with little or no sales, neighborhoods trending towards rehab......all the hard to appraise homes. But, what I am seeing that is concerning is this risk score is proprietary property and may not be shared with 3rd parties. I found this out (that I could not share) when I caught grief for sharing a low score with a Realtor, the reason for needing a desk review. I have found in some companies, the loan officer may not even have access to this report. In broker situations, the lender will pull the UCDP, which could create a last minute surprise. Since use is not mandatory, points of useage varies from company to company.

Moral of the story: it does not matter if the appraisal is back or has the value. What matters is if the UW has reviewed and signed off on the report. (And this could be a sticking point with companies that restrict how many "touches" an UW has with each file). Lenders are required to review appraisals in 3 business days of receipt.

Moral of the story ii: big bro is tracking every foreclosure where your name appears and if there was a UCDP score.

[MikeJaquish]

Thanks. All news to me.

[Brandon Hoffman]

I was unaware but not surprised. Thank you for sharing.

[Silverfall]

I was aware of the UCDP but didn't realize that it was being used in underwriting with scores and such. I knew they were tracking appraisals and essentially having some sort of algorithm that was flagging ones that might be off but didn't realize the extent of it.

I know here most appraisals seem to come out of lender review within 24 hours of receipt of the appraisal so we must not have too many issues. I find most lenders aren't telling customers that the "appraisal is back" until after it comes out of review though.

[jdhall1]

Thanks for posting. I wasn't aware the scoring.

[SmartMoney]

You may have heard the phrase collateral underwriting (CU). My post is about the mechanics of CU. As an agent, know that the UW must review the appraisal (and score) within 72 business hours of receipt.

[BoBromhal]

familiar with the requirement for underwriting review, and need to hold your horses until it was done. Not familiar with scoring or the other mechanics.

Thanks for the education!