Lenders Must Dive Into UAD 3.6 or Risk Getting Left Behind: A Q&A with ServiceLink’s Liz Green

UAD 3.6 is here. If lenders haven’t started preparing for this monumental shift in the valuation world, now is the time to start. MBA NewsLink interviewed Liz Green, senior vice president of valuation solutions at ServiceLink, about her insights into UAD 3.6, what it means for the industry and how lenders can ensure they and the appraisers they work with are ready for the change.

MBA NewsLink: What is UAD 3.6, how does it differ from UAD 2.6, and how will it impact the industry as a whole?

Liz Green: The implementation of the new Uniform Residential Appraisal Report and corresponding 3.6 Uniform Appraisal Dataset (UAD) falls under the Federal Housing Finance Agency’s (FHFA) Uniform Mortgage Data Program (UMDP) which compels the GSEs to work together for standardized information requirements in connection with the mortgage loans they purchase. Of note: The FHFA is the regulator of government sponsored enterprises Fannie Mae and Freddie Mac, also known as the (GSEs). UAD 3.6 is the next generation of those appraisal requirements, which were first implemented as UAD 2.6 in September 2011. UAD 3.6 represents a new style of client requirement for reporting appraisal replacing the static, boilerplate numbered forms with a common, data-driven Uniform Residential Appraisal Report (URAR). The art, science and professional process of appraisal are not changing. However, the new report requires much more detailed information to be collected, analyzed and presented in the new reporting format.

The use of the MISMO Reference Model V3.6 data standard that underlies this reporting provides a common language so that all appraisals in this style are consistent in format and content. Fannie Mae and Freddie Mac have issued detailed specifications detailing requirements for the new report and companion XML dataset.

MBA NewsLink: What does UAD 3.6 mean for lenders? What is the timeline for impact?

Liz Green: As of January 26, the UAD 3.6 initiative has entered into a broad adoption period which is the roll-out period for lenders and their appraisal partners to begin transacting the new 3.6 URAR package. This ramp-up period facilitates the move away from the legacy UAD 2.6 leading up to the November 2 mandate when all new loan submissions to either GSE on or after this date which use an appraisal must be in the new 3.6 style.

MBA NewsLink: What is your advice for lenders who are struggling with where to begin?

Liz Green: Lenders should be actively engaged in evaluating both internal operational considerations regarding the new UAD 3.6 as well as engaging their appraisal services trading partners for considerations for ordering, processing and delivering the new reporting requirements. There are several great reference materials published by the GSEs as well. Here are some tips:

• Create an inventory of all business areas, policies and procedures that address appraisals.

• Work with current and potential trading partners to understand the plans and timelines for supporting UAD 3.6.

• Build your own timeline for implementing UAD 3.6 into your operation including staff training, process and policy updates, technology changes and general business considerations.

MBA NewsLink: When should lenders begin preparing for UAD 3.6?

Liz Green: Lenders should be preparing now for the upcoming mandate. The broad adoption period is intended to allow the industry to ramp up and work out difficulties in time to meet the mandate.

MBA NewsLink: What steps should lenders take to ensure the appraisers they’re working with are ready?

Liz Green: For lenders that engage appraisers directly, survey your panel for their readiness, focusing on the following questions:

• Has the appraiser engaged with GSE-verified software provider?

• Has the appraiser taken the 7-hour CE training course defined by the GSEs?

MBA NewsLink: What is the risk for lenders if the appraisers they work with are not fully prepared by November 2?

Liz Green: Ultimately, the impact is on the saleability of the loans to the GSEs. Files already in progress at the time of the mandate will be allowed to complete delivery on the legacy format and the GSEs have provided until May 3, 2027 to clear the pipeline.

MBA NewsLink: What are some common pitfalls you foresee lenders making when it comes to the adoption of UAD 3.6? How can they avoid these pitfalls?

Liz Green: The biggest pitfall is waiting to prepare for the change. The impact of implementing the new UAD 3.6 is wide-reaching. The sooner lenders can prepare and begin to introduce the necessary changes to support the new requirements the smoother complying with the mandate will be. The current focus is on Fannie Mae and Freddie Mac’s requirements and timeline. However, the timeline for FHA’s implementation of UAD 3.6 is expected to be announced in early spring.

MBA NewsLink: Can you share resources that lenders can utilize to better prepare themselves and the appraisers they’re working with for UAD 3.6?

Liz Green: In addition to the materials found on each GSE UAD website, there are various education providers engaged in both the GSE commissioned seven hour continuing education class for appraisers as well as other specific training options. ServiceLink has partnered with Grid-ML to offer their UAD 3.6 digital reference guide to our panel of appraisals via uniformappraisal.com.

Liz Green, SVP of Valuation Solutions at ServiceLink, is strategist, solutions architect and speaker who has been on the forefront of applying data standards to valuation technologies since 2009. A recognized valuation advocate, Green was named an MBA Tech All Star in 2015 for her leadership in the MISMO property information and valuation sectors and was recognized as the Collateral Risk Network’s (CRN) 2025 Valuation Visionary. She also serves as the chair of both CRN’s Standards Committee and MISMO Property and Valuation Services Community of Practice Committee.

At ServiceLink, Green is responsible for shepherding the organization through the new Uniform Residential Appraisal Report (URAR) and Uniform Appraisal Dataset (UAD) 3.6 transition, as well as leveraging her expertise in mortgage technology to further promote innovation, product evolution and business development within the valuation business unit.

(Views expressed in this article do not necessarily reflect policies of the Mortgage Bankers Association, nor do they connote an MBA endorsement of a specific company, product or service. MBA NewsLink welcomes submissions from member firms. Inquiries can be sent to Editor Michael Tucker or Editorial Manager Anneliese Mahoney.)