Saying
it would enhance the uniformity and depth of collateral, borrower, and loan
data, the Federal Housing Finance Agency (FHFA) is gearing up for a new program
to improve Freddie Mac and Fannie Mae's data collection standards and processes.
The Uniform Mortgage Data Program will be
phased in over the next year.
Under
the program, the two government sponsored enterprises (GSEs) will develop a common
framework designed to increase lender efficiency while enabling the GSEs to
manage risk more effectively. A common
set of standards will provide uniformity for appraisers, mortgage lenders,
servicers, and other information providers for the data they are required to
provide in their submissions to Fannie and Freddie.
FHFA
said that the new standards were developed from information independently gathered
by each of the GSEs from their constituencies on the need for improved data and
consistency. Under the new reporting requirements FHFA is developing:
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Uniform Appraisal Dataset: This will standardize appraisal data
definitions for a key subset of fields on the uniform residential appraisal
reports in order to enhance data quality and promote consistency. There will
not be significant changes to the forms; the focus will be on developing clear
definitions that will produce standardized responses.
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Uniform Collateral Data Portal: Lenders will be required to use the portal
for the delivery of electronic appraisal data which will be accessed through a
web-based interface or direct system-to-system integration.
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Uniform Loan Delivery Dataset: The two GSEs are transitioning their single
family file formats to the industry standard MISMO® Version 3.0 model and will
increase the number of data elements required at delivery. FHFA said that the GSEs are aligned on the
majority of the core data elements and their definitions except where there is
an issue of proprietary business or credit policy. Under the requirements the GSE-specific
conditionally required fields are minimized and, as much as possible, initially
required delivery data is confined to data that lender systems collect today.
Specifications for the new system
will be available in June along with Implementation Guides for Loan Delivery
Data which will be published separately by Fannie Mae and Freddie Mac. The portal is expected to be available for
electronic delivery of appraisal data by October 1, 2010 and new data standards
for all single-family appraisal forms will be required by January 1, 2011. Lenders
will be required to deliver electronic appraisal data for all loans with
applications dates after January 1 that are delivered to either Freddie or
Fannie on or after April 1, 2011. After September
1, 2011 all loans must be delivered to either GSE using the MISMO v.3.0 dataset
and the format.
While
press releases and facts sheets on the Uniform Program do not mention HVCC
enforcement specifically, the new program is apparently what FHFA Acting
Director Edward J. DeMarco was signaling in a letter sent last week to New York
Attorney General Andrew Cuomo. Citing
the financial straits of the GSEs, DeMarco said that the GSEs would not be setting
up and funding an Independent Valuation Protection Institute to enforce
provisions of the Home Valuation Code of Conduct (HVCC). The Institute had been part of an agreement
between Cuomo and FHFA to settle a lawsuit the Attorney General had brought
against Washington Mutual Bank charging mortgage fraud. In lieu of the Institute, DeMarco said he had
directed the Enterprises to provide a targeted complaint process for violations
of the Code. Freddie and Fannie, he
said, will use a standardized complaint form and process to facilitate
submission of the form through an Internet-based process.
Freddie Mac Chief Executive Officer Charles E. Haldeman, Jr. said of the
announced standards, "We applaud FHFA on this important effort to improve
appraisal and loan data quality. The importance of data quality to the mortgage
market's long-term success makes this the right call at the right time. The
additional loan and appraisal data requirements, standard data definitions, and
a common framework for capturing these new data sets will support the mortgage
industry's efforts to manage risk, reduce costs, and respond more efficiently
to market changes.