The Path to Nov. 2: MISMO Panelists Discuss UAD 3.6
Cover photo: Rachel Robinson (left) and Erin Dee (right), Thumbnail photo: Liz Green.
Note: The Mortgage Bankers Association will host a webinar about UAD 3.6 on Thursday, June 4 at 2:00 PM ET.
Uniform Appraisal Dataset (UAD) 3.6 will change how appraisal data is structured and delivered to the GSEs. Panelists at the MISMO Spring Summit in Louisville, Ky., shared advice about the transition as the Nov. 2 deadline quickly approaches.
Liz Green, senior vice president of valuation solutions with ServiceLink, Moon Township, Pa. and chair of the MISMO Property and Valuation Services Community of Practice committee, moderated the panel. “This is the biggest change we’ve seen in appraisal since 2005, so that’s quite a long time ago,” she said.
“From a MISMO perspective, I want to set the stage of what this means for us as not only a community of collaborators, but also the impact that it has on the industry,” Green said. “I’m very passionate about the game-changing effect that MISMO’s vocabulary is going to have on the process of appraisal.”
“In particular, the enumerated data points are the lifeblood of our standard,” Green said. “We have so much information that today bubbles up into the appraisal report in addendums, in free-form narrative, in addition to the six pages of the standard forms that are used today that have some structure to them and a MISMO dataset that goes with them. But what’s really exciting is that–regardless of the location of the subject property or the appraiser–the common language will be immediately available to everyone through this process.”
Green said the immediate availability of the common language cannot be overstated. “This initiative, obviously, is massive,” she said. “It has required the engagement and investment of everyone: software providers, lenders, appraisers, appraisal management companies, and the list goes on. We’ve all had to work together to work toward getting this ready for implementation.”
The implementation process is just beginning, Green added. “We’re in broad adoption right now,” she said. “That started at the end of January, and I’m happy to say that my company, ServiceLink, to date has delivered 137 live UAD 3.6 reports so far. We’re really excited about that. We’ve invested heavily in our training of not only our staff, but our appraiser partners as well as working closely with our lender clients and our integration partners.”
Rachel Robinson, chief operating officer with True Footage, Dallas, noted she is excited about the change. “We’ve lived in a world where the forms we’ve been working with are full of paragraphs of whatever information an appraiser feels like sharing with us, which is a challenging space to live in when sitting in the lender seat, trying to figure out what exactly we have from an information perspective.”
“What does this tell us about the property, and how do I need to think about this in terms of revisions and repurchases?,” Robinson continued. “That’s a difficult world to navigate. So, having a structured data set with very specific enumerations–a very specific quantifiable data set that allows us to really think through risk decisioning in a different way and prevent a lot of those revisions and repurchases–that’s something we’re all excited about. I’m very proud of everybody who’s worked on this for so long for coming up with something that I think is going to be a lot more usable. I want to really make sure we highlight how functional and amazing this data set is.”
Looking at UAD 3.6 from the secondary market perspective, Erin Dee, chief operating officer with Interlinc Mortgage Services, Houston, and former president of the Texas Mortgage Bankers Association, Austin, said more data and more consistent data is very helpful, “because that’s more that will pass along to the investors. That provides more certainty to investors, which could ultimately pass through to a better price when they have more certainty and less risk. That, and not having to read pages and pages of addendums. I will say, as a consumer of appraisals, that I’m looking forward to that.”
Dee noted there is still some confusion about UAD 3.6 in the lending community. “And I am being told that appraiser attrition is going to be a problem. I was given an estimate that roughly 10% of appraisers could just opt out and retire or not do this, so that’s going to affect our landscape.”
Patrick Brown, vice president of quality assurance and chief appraiser with Valutrust Solutions, Overland Park, Kan., a Williston Financial Group company, said there is a “spectrum of information” among appraisers about what UAD 3.6 is and what it is not–and what it will require of them. “So that is one of the hurdles that appraisers are facing, and really that ends up being a business decision for them, of course. They’ve got to make those calls on their own. They’ve got to go to the source information and understand what UAD 3.6 is, because when they do, they’ll discover it’s not as daunting as the forums on social media might lead them to believe.”
“Beyond that, tech adoption is going to be a big part of it, because to Liz’s point, it’s been since 2005 that we’ve had a change this big, and while there are a variety of appraisal report technology providers out there, the solutions that they offer vary greatly, from what feels pretty comfortable to what is very tech-enabled,” Brown added. “So, appraisers who are willing to step out of their comfort zone and lean into that space of adopting technology, allowing AI to play a role in their appraisal report completion, will come out miles ahead, in my opinion.”
MISMO Summits bring together lenders, servicers, regulators, insuring and guaranteeing agencies, GSEs and technology providers to exchange ideas and drive progress. The MISMO Fall Summit runs from Aug. 24 through 27 in Reston, Va.
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Note: Panelist Erin Dee recently sat down for an in-depth Q&A with MBA NewsLink about UAD 3.6.
