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16Jul

Top MERS QA Findings for 2022

July 16, 2023 lionfiregroup Residential

Blog post originally posted on the MetaSource Mortgage Blog

Meeting the reconciliation and reporting requirements of MERS® is never effortless, but 2022 was a year that put the best efforts of servicers to the test and then some.

With round after round of mortgage industry layoffs, relying on trained and experienced MERS quality assurance (QA) employees to manage compliance functions was no longer an option for many – and it showed.­­­­

Our annual analysis of third-party QA audits suggests that in many cases, the job was relegated to employees who weren’t necessarily less qualified but had less MERS experience. These employees struggled with a process that can be challenging even for those who have been through it many times.

This report discusses the challenges that resulted, highlights one area of improvement, and provides some best practices for ensuring MERS compliance in 2023.

Top 2022 MERS QA Audit Findings

Here are the MERS QA challenges that gave Members the most trouble in 2022:

  1. Member did not reconcile MERS system data in accordance with the requirements of the MERS System Procedures Manual
  2. Document samples submitted for review were not compliant with state-specific requirements or with requirements for identifying MERS as the nominee
  3. Member did not have adequate quality assurance processes in place to satisfy requirements

Enhanced Document Requirements Revealed Additional Errors

In previous years, MetaSource auditors focused on whether or not Members had procedures in place for meeting documentation requirements. However, a recommendation that auditors review document samples in addition to processes was recently added to the MERS review guide.

In order to provide the best third-party review services possible, we updated our own audit processes at MetaSource and now require Members to provide us with document samples.

“We ask for samples of all document types that would be prepared in MERS’ name,” MetaSource Director of MERS Services Rachel Pylant said.

Reviews of such document samples revealed errors that may not have come to light in past years. For example, there were several instances in which language identifying MERS’ role as the lender’s nominee was omitted. The MetaSource Team also saw several errors related to state-specific requirements around address listings and MERS verbiage.

“The most important thing tied to document samples and document review is paying attention to MERS requirements that are state- and document-specific. Certain states have different requirements,” MetaSource Customer Success Manager Katherine Adams said.

Staffing Challenges Led to Increased Findings

The main source of not only state-specific document challenges but also reconciliation and quality assurance process challenges was staffing, or lack thereof.

Pylant said the issue of staffing came up many times during the check-ins MetaSource conducts with clients.

“We work with clients very closely in general and also because a lot of the people we are working with are newer to the process,” she said.

The MetaSource Team found that Members who experienced a great deal of turnover this past year particularly struggled with the reconciliation process.

Download the full report to learn more about reconciliation challenges, an area of improvement, and best practices for ensuring MERS compliance in 2023.

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03Jul

How AI Brings Trust to Loan Portfolios

July 3, 2023 lionfiregroup Residential

Blog post originally posted on the TRUE blog post

Imagine an alternate reality where trust does not exist…

In this world, everyone requires documented evidence for any assertion, any claimed fact. The administrative toil it would take to overcome relentless suspicion and doubt sounds like a dystopia fit for a movie!

If you work in the mortgage industry, this fictitious scenario might not sound so far removed from your daily reality. Lending decisions are based on information presented by borrowers, but borrower data cannot simply be trusted as fact. And so ensues a process of gathering and reviewing documentary evidence, the results of which are checked and rechecked in a complex and costly process of continual quality control (QC).

Here’s how Garth Graham, Senior Partner at mortgage industry advisory firm STRATMOR Group, characterizes the situation.

This reality is no longer one that our industry must endure. In TRUE’s version of this movie – and this really is a true story – ingenuity intervenes to save the day.

TRUE customers throughout the lending industry, from originators to funders, are integrating artificial intelligence (AI) into QC processes. Their reality is one where the toil of processing borrower documents is removed, automated verification virtually eliminates doubt about borrower data, and assessments of risk are much lower as loans are traded to the secondary market.

AI in the Post-Closing Process

Lenders using TRUE, industry proven AI that captures and verifies trusted borrower data, will typically use this technology at the start of loan manufacturing. The TRUE AI platform automates document-to-data classification and extraction tasks with levels of accuracy and completeness that greatly exceed the performance of unaided humans.

However, the most important phase of QC is arguably the post-closing process. This is a lender’s last chance to ensure the accuracy, completeness and integrity of the data that supports its loan decision. Applied here, TRUE’s AI brings a high level of automation to most post-closing QC tasks. This includes:

  • A complete audit of the accuracy and correctness of the loan application
  • The presence, correct versioning, execution (signatures) and accuracy of all underwriting documents, including re-verifying them if necessary while ensuring data integrity
  • A check of the underwriter’s decision which supported the loan application
  • Verification of the appraisal, property eligibility, project eligibility, and the mortgage insurance documentation

By integrating AI, lenders can be confident that every loan in their portfolio has been audited to the highest possible standards of accuracy and completeness before the portfolio is offered to permanent funders and servicers.

Passing Investors’ Test of Trust

Any mortgage sold in the secondary market must meet requirements set by investors, such as underwriting criteria, documentation standards, etc. Investors sample a small percentage of loans within a portfolio to identify those which fall below their standards.

For lenders, these tests are a major point of risk. Defects in the data, and a lack of supporting documentation, can be extremely costly. There may be individual loan buybacks, demands for additional testing of a broader sample, or rejection of an entire portfolio if too many loans are assessed as substandard.

The AI in the TRUE Platform reviews individual loans in minutes, which means 100 percent QC can be performed across entire mortgage portfolios in a matter of hours. This capability is offered in a product, TRUE Data Verification. It helps to ensure every loan meets the specific criteria set by the purchasing investor, with interrogation down to the level of individual documents.

When both lender and investor apply TRUE to the trading of loans, this test of trust becomes highly automated, fast and efficient. It means zero or very few defects, faster turnarounds allowing warehouse funding to be paid sooner, and ultimately improves lenders’ quality ratings which lowers the costs of funding over the long-term.

Servicing Transfer 

Lenders and loan quality are also key factors for mortgage servicers when bidding for portfolios. Accurate and complete loan data is paramount when loans are transferred to a different entity for ongoing servicing, and this is where AI can play another role in creating trust.

By reviewing loans with the support of TRUE Data Verification, lenders can be certain that they’ve provided a complete package of data and documents. Servicers can use the same technology and processes to assess loans on the way in, with greater confidence in risk scoring allowing more aggressive bidding.

Convenience and Compliance

Two further post-closing challenges that are eased by TRUE are document retrieval and auditing for regulatory compliance.

The TRUE Platform makes it easy to for lenders to apply document retention policies that ensure regulatory compliance and minimize long-term storage costs. As TRUE processes each document, it creates a permanent association between data points and their source documents. This allows anyone from loan officers to auditors to quicky retrieve and interrogate any information, including for queries that arise during post-closing QC.

Data reviews can also be aligned with rules contained in regulations such as the Truth in Lending Act (TILA), Real Estate Settlement Procedures Act (RESPA), and relevant state and federal consumer protection laws. This helps lenders audit all loans for compliance and provides a document trail that can be provided to external assessors.

An Ending Based on Truth

A world where there is assurance of facts is one where trust flows easily. TRUE is helping both lenders and secondary market entities change the plot of the lending story to one that always has the happing ending of proven data, lower risk and easier trading of loans.

It may not have the drama of movie dystopia, but it’s a state of affairs that the mortgage has long sought and, thanks to AI, can now achieve.

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18Mar

The Continuously Improving ROI of Trusted Data

March 18, 2023 lionfiregroup Residential

Blog post originally posted on the TRUE blog post

What is the return (ROI) on your technology investments, and what role does clean and trusted data play in these investments, and across the mortgage industry?

This paper provides a thorough exploration of these questions.

Written by highly experienced analysts in the fields of ROI, data automation, and artificial intelligence (AI), and applied to the specific challenges and demands of mortgage businesses.

Many ROI assessments focus only on productivity and efficiency, but in this report we also consider:

  • The Data Flywheel: the virtuous circle and accelerating benefits from continual discovery and exploitation of more and better quality data
  • Why Clean Data is Trusted Data: why the value of data increases with use, enabling staff to be more efficient, confident, and innovative
  • Business Elasticity: how trusted data finally enables lenders to adapt to changing volumes without the costs and challenges of hiring and firing
  • Cost to Correct: how AI and automation helps to reduce costs and mitigate risk by preventing data errors or identifying them sooner
  • Exponential Potential: why intelligent automation leads to cumulative ROI impact and creates the potential to build more competitive lending businesses

AI-powered data automation is being adopted by more mortgage lenders. The aim of this paper is to provide you with questions and expert insights that will help you to evaluate the need, effects and timing of automation investments, equipping you to compete in an industry undergoing digital disruption.

Download your copy today.

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01Mar

Top 15 Mortgage QC Findings for 2022

March 1, 2023 lionfiregroup Residential

Blog post originally posted on the MetaSource Mortgage Blog

For the mortgage industry, 2022 must have felt a bit like whiplash: from the chaos of record volume and staffing shortages in 2021 to plummeting originations and layoffs just a year later. And mortgage quality control was not immune to the effects of such see-sawing industry challenges.

While “closing disclosure tolerance defects” held the first spot in the MetaSource Team’s top QC findings list – as it consistently has for years, our analysis revealed a troubling pattern in the rise of defects that most closely correlate to repurchase risk. In 2022, four such defect categories jumped in the rankings.

This findings report provides details behind those numbers, along with some tips for how you can prevent findings – and repurchase risks – in 2023.

Top QC Findings for 2022

Here is the complete list of our top 15 mortgage QC findings for 2022, including all loan types and both regulatory and agency findings:

  1. Closing Disclosure – Defective – Tolerance
  2. Product Parameter – Points and Fees
  3. Income Documentation – Aged
  4. Income Not Documented – Other
  5. Closing Disclosure Defective – Calculating Cash to Close
  6. Insufficient Assets to Close
  7. Closing Disclosure – Defective
  8. Other Application / Processing Documentation – Loan Estimate – Timing Violation
  9. Other Application / Processing Documentation – Intent to Proceed
  10. Incorrect Income Calculation – Other
  11. DU or AUS Findings Report – Missing or Defective
  12. Closing Disclosure – Timing Violation
  13. Undisclosed Liability
  14. TILA Finance Charge Violation
  15. Property Insurance Not Documented – Missing or Defective

Documentation Challenges: The Mortgage QC Equivalent of “Noise”

As the MetaSource Team predicted in our 2021 QC Findings Report, closing disclosure tolerance defects topped the list in 2022 amid a documentation-trouble streak that includes six of the last seven years.

“One thing we see year-over-year is the constant waste of time spent chasing (missing) documents,” said MetaSource Senior Director of Mortgage Services Brady Meadows.

Many documentation issues are the mortgage QC equivalent of “noise,” Meadows said. They aren’t considered genuine business threats, but are, instead, seen as a persistent background irritation that signifies inefficiency. Nevertheless, they almost certainly come with a price tag.

And some documentation issues are much “louder” – and cause much more financial harm – than others. Take income documentation aged defects as an example. They often result in repurchase demands, making them a major problem for lenders.

Download the full 2022 QC Findings Report to learn about the top defects that result in repurchase demands and how to reduce findings and risk in 2023.

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18Sep

Top 10 Servicing QC Findings for 2021

September 18, 2022 MetaSource Residential

Document challenges continued to be a leading cause of QC trouble for mortgage servicers in 2021, a year in which record high mortgage levels exacerbated the effects of process shortcomings.

It was a problem that left servicers unable to substantiate a wide array of process requirements, from documenting timely follow-ups to customer inquiries to missing disclosures on service transfer letters. In fact, documentation lapses made up 9 of the top 10 findings identified in MetaSource’s annual analysis of servicing QC findings.

This findings report discusses what the top 10 findings were, why documentation remains a main source of difficulty, and how to overcome document challenges and ensure compliance.

Document Management: A “Daunting Task” for Mortgage Servicers
Our 2021 analysis shows that missing documents left servicers unable to provide proof that they met requirements. In many cases, servicers’ underlying processes were fully compliant, but the supporting records were insufficient or inaccessible at the time of the audit.

Why was this the case? MetaSource’s QC Manager John Morales said it best. “Establishing and maintaining adequate document management processes can be a daunting task,” he said.

In some cases, Morales said, the documents required to substantiate compliance were notated in the servicer’s records, but the original document image, which can be difficult to retrieve, was not available at the loan level.

According to Morales, many servicers relied on notations and codes as proof that requirements were met. Unfortunately, this led to negative outcomes.

“Reliance on codes and notations alone to substantiate work completed can open the door to findings where a conservative interpretation of a guideline requires physical proof of the underlying document,” Morales said.

For example, customer inquiry receipt dates are considered questionable when sent without a date stamp. The same is true for electronically provided payment receipt dates and notations of sent breaches when copies aren’t available.

In other cases, mandatory documents were retrieved and stored but were purged after a liquidation or service transfer before audits were submitted for review. This, too, resulted in a lack of required documentation and, therefore, findings.

Top Servicing QC Findings for 2021

Here is the list of our top mortgage servicing QC findings for 2021:

  1. Incorrect set-up and timely premium payment of taxes, insurance, and mortgage
    insurance
  2. Failure to provide proof of payment within 24 hours of receipt due to
    inability to prove receipt date via various methods of payment acceptance (e.g.,
    online, phone, and lockbox)
  3. Missing accounting histories where initial loan set-ups are completed after the first
    payment was submitted and now second payment is due.Download the full report to see the complete list of top servicing QC findings, learn why overcoming document shortcomings is more important than ever, and discover how to ensure compliance in 2022.
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29Jul

Constellation Mortgage Solutions Appoints Technology Innovator Kendrew Peacey as CTO

July 29, 2022 California MBA Residential

Constellation Mortgage Solutions (CMS), provider of enterprise mortgage loan origination and servicing technology, recently appointed Tech Industry Veteran Kendrew Peacey as CTO. As a member of the executive team, Peacey will lead CMS in evolving and innovating lending technology to grow the product line and increase sales. Peacey and team will deliver the next generation of LOS in late 2022, equipping CMS clients with enhanced functionality and a single application suite that will elevate job performance and user experience.

“Kendrew was originally engaged as a consultant and proved himself an invaluable member of the team, with his global experience in implementing, and evolving enterprise technology, he is a great fit for CMS,” said Stephen Ryczek, CMS President and General Manager. “We’re excited to have him lead the team as we deliver the next generation of lending technology to the mortgage industry.”

Peacey brings with him over 30 years of experience developing, integrating, and implementing technology tools and software for various enterprise level companies. He has a proven record orchestrating IT and software engineering operations while managing global teams across multi-million-dollar projects. Peacey founded Ascension Technologies, a global software development company and leader of digital transformation, and previously served as CTO of U2 Logic, The Media Services Group, and in consultant roles at various companies including IBM.

“I’m excited to join Constellation Mortgage Solutions as CTO and help fill technology gaps the mortgage industry experiences today,” said Peacey. “Bringing a product to market that has not yet been seen, and doing it successfully, is fulfilling. New technology not only adds to the growth of CMS but also the lenders we support by providing a single point of entry and complete functionality for them to efficiently perform their job.”

Peacey’s contributions to CMS will continue to drive the unprecedented growth the company has experienced in the last two years.

About Constellation Mortgage Solutions
Constellation Mortgage Solutions provides industry-leading lending technology solutions through its products: Mortgage Builder LOS, Mortgage Builder LSS, and ReverseVision LOS. As the Gold Standard for mortgage solutions, CMS offers Lenders of all sizes enterprise technology empowering Lenders on the front lines with innovative solutions designed to deliver exceptional loan quality, regulatory compliance, and drive profitability. CMS has been working for more than two decades to help mortgage professionals streamline operations and close more loans faster to increase ROI. https://constellationmortgagesolutions.com/

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29Jun

Where is eClosing with Remote Online Notarization Available?

June 29, 2022 California MBA Residential

Blog originally posted on Spruce’s Blog

 

A classic real estate closing can have upwards of 100 pages of documents to sign, and the ability to do this both remotely and electronically is alluring to everyone involved in the transaction––particularly busy homeowners. But, RON (remote online notarization) isn’t available everywhere, so understanding when and where you can utilize it is incredibly important. Check out our 3 steps to determine when and where you can use RON.

First, let’s start with the basics: what is RON (Remote Online Notarization?)

RON is a form of eClosing, which is the act of closing a mortgage or real estate transaction electronically. All or some of the closing documents are viewed and/or signed online through a secure digital environment. Depending on the state you live in, you can take advantage of three main types of eClosing options: RON, hybrid eClosing, or in-person eClosing. ‍A RON closing is a digital online closing that occurs where the signers and the notary meet via an audio and video application. The documents will contain an electronic signature and electronic notarization. ‍

3 Steps to Determine When and Where You Can Use RON

There are three methods that most title companies use to figure out where they can offer remote online notary services to clients: state legislation, underwriter requirements, and eVault capabilities.

Step 1. Check Which States Have Passed RON Laws

The first step to determining if RON can be offered on a transaction is to see if the state has passed legislation. To date, 38 states have passed laws allowing remote online notarization. The states that have enacted RON laws are: Virginia, Montana, Texas, Nevada, Indiana, Tennessee, Minnesota, Vermont, Michigan, Ohio, North Dakota, Idaho, Utah, Kentucky, Arizona, Washington, Iowa, Oklahoma, Maryland, Nebraska, Florida, Wisconsin, Pennsylvania, Alaska, Louisiana, Colorado, Oregon, Missouri, Hawaii, Wyoming, West Virginia, Kansas, New Hampshire, Arkansas, New Jersey, New Mexico, Illinois, and New York.

Step 2. Check Underwriter Requirements

Even if a state has passed RON legislation, title insurance underwriters often have their own requirements for where remote online notarization is available. For example, underwriters have different requirements based on whether the transaction is a refinance or a purchase.

There are also counties in states that have passed legislation who won’t accept RON documents––making underwriters wary of insuring RON transactions.

Step 3. Check on eNote and eVault Capabilities

Lenders who want to offer RON closings to their borrowers will need to facilitate an eNote, which is the digital equivalent of a promissory note. It’s not as simple as just merely scanning a document into a computer and having it signed. To ensure the security of the electronic note, eNotes are created in a special file format and must be stored in an eVault.

An eVault is a repository for managing and transferring electronic documents. If a lender doesn’t have a relationship with an approved vendor, such as Notarize, the closing cannot be done via remote online notarization. 

eClosing via RON is the Future of Real Estate Transactions

Despite some of the logistical hurdles, eClosing via RON is a winner for everyone involved in the real estate transaction process.  We’ve heard from real estate agents and homebuyer’s alike that the use of RON is moving beyond a benefit to an expectation.

For lenders and large-scale investors, it creates a higher level of operational efficiency. For homeowners, it provides much needed flexibility in what can be an extremely stressful process. Rather than having to show up at a specific location at a certain time, consumers can sign documents at a place and time that’s convenient for them. Offering RON closings can be a key differentiator for lenders and can sharpen their competitive edge in an evolving market.

Interested in learning more about how Spruce’s RON closing process? Get in touch with our team here.

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29Jun

2021 MERS QA Findings Report

June 29, 2022 MetaSource Residential

Staff shortages, office closings, and high volumes created ongoing disruption for the mortgage industry in 2021.

And, based on MetaSource’s annual analysis of third-party QA reviews, some MERS processes suffered as a result.  

Overall, our analysis showed that the top three areas of MERS compliance challenges fell along familiar themes. We also discovered that while the overall exception rate increased from 11% in 2020 to 19% in 2021, some notable improvements were made.

This report discusses why these improvements occurred, details surrounding what MERS Members struggled with the most, and best practices for overcoming these struggles in the future.

Top MERS QA Audit Findings for 2021

Here are the MERS QA challenges that Members struggled with most in 2021:

Rank
Finding
1. Written internal policies and procedures were missing or did not contain enough detail to ensure compliance with the most recent MERS requirements
2. Failure to conduct monthly or quarterly data reconciliation based on requirements and volume
3. Failure to properly manage/monitor internal audits, subservicer, or third-party vendor through reporting of QC reviews to confirm MERS standards are met

The Challenges of Maintaining Detailed, Up-to-Date Policies & Procedures

Ensuring that internal policies are thorough and up-to-date is a perennial struggle for many MERS Members. But it was heightened in 2021 when additional difficulties, including staffing shortages, left some servicers without the MERS support they needed. Many servicers were left to rely on staff members who were unfamiliar with MERS requirements and the level of detail necessary to meet current policy and procedure expectations.

Other servicers fell short of MERS requirements for written policies and procedures as their monthly volumes swelled and, for the first time ever, pushed them over the 1,000-mortgage identification number (MIN) mark. MERS Members over this MIN mark as of March 31 are required to obtain a third-party review, which includes a thorough review of MERS Members’ operational policies and procedures in preparation for the MERS eAnnual report due each year by December 31. Those new to this MIN volume level last year were left subject to monthly reconciliation requirements and third-party reviews for the first time. Similar to those experiencing staffing shortages, these servicers were unfamiliar with the requirements and failed to provide adequate written internal policies and procedures.

This unfamiliarity undoubtedly led to an increase in policy and procedure-related challenges and a rise in the overall exception rate. “About 90% of the Members I reviewed last year did not have detailed procedures,” said Rachel Pylant, MetaSource Director of MERS Services.

The Areas that Showed Improvement

While more Members struggled to meet written internal policy and procedure requirements last year, there were signs of improvement in other areas.

Download the full report to learn what these areas of improvement were, the main reasons for the improvements, and the best practices for ensuring MERS compliance in 2022.

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20May

3 Ways for Lenders to Boost Efficiency in Appraisal Operations

May 20, 2022 California MBA Residential

As the mortgage industry shifts more of its traditional workflows to digital operations – such as with eSigning, eNotes, eVaults, and more – the appraisal process cannot be an afterthought. There are numerous inefficiencies associated with the “old world” of appraisals that are slowing mortgage lenders’ turn times, keeping production costs high, and negatively impacting the borrower’s experience – all of which ultimately affect the bottom line.

This guide highlights three key areas where efficiency gains have been proven to generate measurable ROI: appraisal ordering and vendor allocation, appraisal payments, and communication and visibility. These lender-appraiser touchpoints are riddled with manual, error-prone tasks that are better executed by technology. Automation will not only expand employee bandwidth, but it will also do the work faster, more effectively and with greater accuracy.

Click above to open and download the guide ^^ (there’s no form!)

By focusing on modernizing operations in the three aforementioned areas, lenders have reported increasing efficiency by 213% and reducing their appraisal desk staff by 75%, among other quantifiable benefits.

Want to achieve similar results? Download this free guide to better understand where inefficiencies exist in your appraisal operations and the steps your organization can take to improve its appraisal-related processes and maximize impact.

If you would like to learn more about how Reggora can help, reach out to schedule a conversation with our team.

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20May

5 Things to Know About Desktop Appraisals

May 20, 2022 California MBA Residential

Beginning in March 2022, Fannie Mae and Freddie Mac will begin to accept desktop appraisals. This means that a licensed appraiser will be allowed to complete the home appraisal without physically visiting the property. Instead, they will leverage data that can be made available to via third parties (homeowner, realtor, builder, etc.) and through public sources.

While desktop appraisals should enable faster (and potentially cheaper) approaches compared to the traditional appraisal, there are many caveats that lenders and appraisers should be aware of.

Fannie Mae: About Desktop Appraisals
Fannie Mae: About Desktop Appraisals

This guide from Fannie Mae provides initial details and guidelines for how desktop appraisals will work. There’s quite a bit to unpack here, as well as a few things that we’re awaiting clarity on, but we’ve summarized the key takeaways below, and in this LinkedIn video from our CEO. To dive even further into the topic, be sure to register for our upcoming webinar with Fannie Mae and Freddie Mac on desktop appraisals.

Here are 5 things lenders and appraisers should know: 

1. Eligibility

Not all loans are eligible for desktop appraisals. The loan must be for a purchase transaction, one-unit principal residence, where the loan-to-value (LTV) ratio is less than or equal to 90%. On top of this, the loan file must also be approved by Fannie Mae’s Desktop Underwriter (DU).

2. Floor plans 

A floor plan with interior walls is required. These floorplans typically don’t exist out in the wild, so an onsite inspection will often still need to occur. This inspection might be able to be done by someone other than an appraiser, such as the homeowner, realtor, builder, etc.,

NOTE: These floor plans and measurements may need to abide by ANSI standards starting April 1, 2022. This is something that we are awaiting further clarification on.

3. Appraiser discretion 

The appraiser must have sufficient information to develop a credible report. The appraiser has the discretion to reject the order if they don’t feel comfortable with the data available to them. This means that getting high quality data to the appraiser for the floor plan and other property characteristics will be very important.

4. Verification

Any data (including potentially the floor plans mentioned above) that is provided by third parties with a financial interest in the sale or financing of the property (homeowner, realtor, builder, etc.) MUST be verified by a disinterested source. This could include maps, assessor data, or virtual inspection technologies. It will be important to accomodate any validation and verification processes that will be required by the appraiser, the lender, or both,

5. It’s optional 

When permissible, ordering a desktop appraisal is optional for the lender. The lender or borrower always has the option to request that a traditional appraisal is obtained, regardless if a desktop or some other form of appraisal relief is offered.

As this initiative moves forward, it will be of interest to see the frequency of eligibility for desktop appraisals, and, when eligibility is offered, how often requests for desktop appraisal are actually fulfilled. Either way, this is important progress in the industry that will pave the way for further modernization and alternative products. For more insight on desktop appraisals, view our March 2022 webinar with Fannie Mae and Freddie Mac on the subject.

How can Reggora help? Our goal is to make it easy for lenders and appraisers to adopt desktop appraisals, and we’re currently working closely with Fannie Mae, Freddie Mac, and our appraiser and AMC partners to understand the nuances and provide guidance to the industry. If you have questions about leveraging desktop appraisals and what you should do to prepare, please contact your Reggora customer success team or reach out to our sales team here.

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