An ambitious program at Fannie Mae and Freddie Mac would forever change how lenders handle the appraisal process. But delays to the initiative's implementation are slowing advancement of third-party technology.
Mandated by the Federal Housing Finance Agency, the Uniform Mortgage Data Program seeks to incorporate electronic data delivery in the loan and appraisal process. The effort has been marred by repeated setbacks, creating uncertainty about when and how the industry shift will take place.
Part of the UMDP is the creation of new technology for appraisal data delivery, called the Uniform Collateral Data Portal, and delivery of a set standard for mortgage and appraisal data points, called the Uniform Loan Delivery Dataset and the Uniform Appraisal Dataset, respectively.
Freddie has acknowledged the delay to the scheduled October launch of the UCDP was the result of the later addition of the UAD — which has in turn caused delays for vendors responsible for creating technology to use the UCDP.
"The [government-sponsored enterprises] initially anticipated that the UCDP would be launched before the rollout of the UAD. However, the GSEs later decided to enhance the UCDP by adding the capability to perform a UAD compliance check," so "it made sense to roll out the UAD and the UCDP simultaneously, which Fannie and Freddie did by extending both deadlines to the same date," Freddie's senior product director Annette Best said by e-mail.
Best echoed previous GSE statements that the delay was in part to help the industry by giving it more time to implement not only the UAD and UMDP, but also the ULDD. "Extending the deadlines … provided additional time to ensure a successful rollout and adoption of the entire UMDP," she said.
Fannie Mae said third-party vendors began working on new UCDP technology in summer 2010. But the inclusion of the UAD in the UCDP protocol means vendors — like the ones that produce electronic appraisal documents and services — have to go back and ensure their technology meets the changed requirements. The latest UCDP deadline has the portal launching in June, and Fannie said vendors will begin bringing new appraisal documents to market by April.
"Vendors planning to build integrations to UCDP received integration materials beginning last summer, and received technical specifications in December that included the new UAD compliance check," Piper Beveridge, a Fannie director of product development and management, said by e-mail. "The GSEs will be actively engaging lenders and vendors regarding integration activity beginning in January and continuing until the mandate dates."
Veros, which won the contract to develop the UCDP, is the only vendor to announce an upgrade to its appraisal management system to interface with the UCDP.
Response to the delays has been mixed. Lenders and the appraisal industry like having more time to meet new requirements, but critics say the uncertainty brought on by the delays — including whether the newest deadlines will actually be enforced — raises questions over how an initiative with such broad impact is being managed.
Best declined to answer questions about Freddie's previous efforts in creating a technology portal to accept electronic appraisal data. Veros was previously awarded two separate contracts, one from each GSE, to build a similar platform unique to each company. Fannie's version, the Collateral Data Delivery platform, is up and running for use on a voluntary basis; Freddie's project was scrapped in place of the UCDP. Best wouldn't say how far into development Freddie's version of the CDD was before work stopped.
The housing finance agency mandated the joint technology portal for appraisal data in the UMDP, but has not issued a similar directive for the delivery of the loan document data points in the ULDD, leaving both companies working independently on their respective loan delivery systems.
"The GSEs are updating their existing, respective loan delivery applications to accept the ULDD-compliant data. There will not be a joint platform for delivery of the ULDD," Lynn Calahan, a Fannie Mae director of product development and management, said by e-mail.