Appraisal Changes

It seems like an annual tradition at this point, but brace yourself as major appraisal changes are headed to the mortgage industry again.  The Uniform Appraisal Dataset (UAD) is a set of new reporting requirements that will be going into effect on September 1st for all single-family mortgage loans delivered to Fannie Mae and Freddie Mac, so this affects all Conventional loans.  The word on the street is that FHA plans to follow suit shortly after this goes into effect, so it appears these changes will apply to all loan types moving forward except VA.  The stated goal of the changes is to make sure that appraisals are conducted and communicated consistently, accurately, and effectively.  The reality is that these changes are going to greatly impact the flow of business at seemingly just the wrong time as appraisers and lenders are already terribly busy right now as the super low rates have created a surge in refinances.  The significant appraisal changes will include the following:

  • New appraisal forms
  • New appraisal methodology, terminology,  and coding (more details on this in the last paragraph below)
  • Stricter compliance requirements due to increased government regulation
  • Appraisers will be required to do more research, especially as it relates to improvements made to the property (a description including the condition and quality of all improvements to a home and its basements must now be included in each appraisal)