UAD Lender Kit: Why Appraisers Need to Pay Attention

Daniel Yoder just published a new article on our website discussing why appraisers need to understand the GSEs' recent UAD and Forms Redesign Lender Readiness Kit.

As appraisers adapting to industry shifts like the UAD 3.6 and Forms Redesign, it’s vital to look beyond just the URAR changes. Fannie Mae and Freddie Mac released a resource for lenders, the UAD and Forms Redesign Lender Readiness Kit (June 2024), available at https://sf.freddiemac.com/docs/pdf/uad-lender-readiness-kit.pdf, which holds crucial information for appraisers.

Why focus on a Lender Kit? Because lender readiness directly impacts our appraisal workflow, from orders to submissions and reviews. This kit details significant operational and tech adjustments lenders face, offering appraisers a preview of ecosystem-wide changes.

Here are key takeaways for appraisers from the Lender Kit:

1. UCDP Modernization (Kit Page 11)

The Uniform Collateral Data Portal is evolving, not disappearing. It will support UAD v3.6 submissions via software or web interfaces. A major change is the redesigned Submission Summary Report (SSR), providing "more pertinent information" in PDF and JSON formats. The JSON option suggests increased potential for automated data review, affecting feedback mechanisms. Expect altered message severity and the removal of manual overrides, highlighting the need for initial data accuracy. Lenders will also gain direct retrieval of appraisal XML/PDF files and the ability to link Appraisal Update/Completion Reports to the original URAR.

Implication:* Prepare for potentially different feedback via the new SSR. Increased automation emphasizes data precision before submission.

2. New UAD Compliance API (Kit Page 10)

A significant tech shift is the new UAD Compliance API for each GSE, accessible to appraisal software vendors. Its main function is enabling software to check appraisal data against UAD specifications (conditionality, completeness) before UCDP submission. This pre-check capability promises to substantially reduce revision requests due to compliance errors, improving efficiency.

Implication: Discuss API integration timelines with your software providers. Using this feature could save considerable time.

3. Reinforcing the Move from Form Numbers (Kit Pages 7, 12-14)

The kit confirms the retirement of legacy form numbers. Property and assignment details, not form numbers, will dictate report structure. Appraisals will be ordered and identified differently. Understanding the six key UAD data points that determine the report type is crucial, as detailed in GSE resources like the "Functioning without Form Numbers" guide.

Implication: Adapt processes away from form-centric thinking towards a data-driven approach. Master the key data points.

4. Anticipating Operational Impacts (Kit Pages 15-18)

Lender operational changes will affect appraisers. Expect updates to engagement letters, potential shifts in assignment methods (focusing on competency), and new processes for confirming the appraisal received matches the order based on the dynamic report structure. Lenders will likely perform more risk-based reviews, possibly using the new SSR for automated checks. They are coordinating these changes across all partners, including AMCs and tech vendors.

Implication:* Anticipate adjustments in engagement terms, assignment processes, and review methods (likely more data-focused). Communication with clients is key.

Staying Informed

This Lender Readiness Kit offers appraisers a valuable preview of upcoming changes. Understanding UCDP updates, the Compliance API, the shift from forms, and lender operational adjustments allows for proactive preparation. Monitor official GSE UAD resources and engage with software providers about API integration. Technology supporting data-centric workflows will be essential for navigating this transition. This evolution is more than a new form; it impacts the entire appraisal process. Understanding lender changes helps us prepare our own practices.

To dive deeper into why these lender-focused changes matter for your appraisal workflow, read the full article here: https://www.valuemate.ai/blog/uad-lender-kit-why-appraisers-need-to-pay-attention