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This article addresses a common question: Can lenders order the ‘appraiser direct’ hybrid appraisals today? The answer is ‘Yes’ and typically requires no changes to the current ordering processes, Loan Origination Systems (LOS) and Appraisal Management Systems (AMS).
This means thats lenders can order hybrid appraisals directly from their approved appraisers. Recent articles address hybrid appraisal eligibility and hybrid appraisal adoption and benefits.
Appraisal direct hybrid appraisals readiness
Appraiser direct hybrid appraisals are possible because the GSEs have implemented controls necessary to ensure only approved property data vendors with API integration, and trained property data collectors, can complete Uniform Property Data (UPD) reports. UPD is the standard property data format that supports both Fannie Mae Property Data Collection (PDCs) and Freddie Mac Property Data Report (PDRs). In summary:
- The LOS and AMS already support hybrid appraisals
- Lenders must use GSE approved and integrated property data providers
- Property data providers must successfully submit UPDs to GSE APIs
- Appraisers are able receive hybrid appraisal orders directly today from an AMS
- Appraisers are able to receive UPDs from approved GSE property data providers
- Appraiser direct hybrid appraisals are compliant with independence requirements
- Payment processing for traditional appraisals can be used
- Lenders are already completing appraisal direct hybrid appraisals
LOS and AMS support appraisal direct hybrid appraisals
Most LOS and AMS vendors and systems already support ordering hybrid appraisals – the Fannie Mae 1004 Hybrid and Freddie Mac 70H and addenda – as these products have been approved selling guide appraisal forms since August 2023.
Lenders (and appraisers) must use GSE approved property data providers
The GSEs do not endorse or recommend vendors, but they do ensure property data providers meet the minimum requirements to perform UPDs.
Additionally, individual property data collectors must complete a training course, certification exam, test UPD assignments and initial ‘live’ supervised UPD assignments. Property data collectors are subject to periodic background checks, continuous monitoring and can be removed from accepting assignments.
The GSE conduct quality assurance reviews of submitted UPDs and may submit feedback to property data providers. Newly approved GSE property data providers are subjected to additional oversight as they onboard new lender customers.
For more information about the approved GSE property data collector vendors see Fannie Mae Integrated Vendors and Freddie Mac Approved Vendor lists.
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Property data providers must successfully submit UPDs to GSE APIs
The GSE APIs capture the full contents of the UPD – text, images, floor plans, measurements – allowing comprehensive information about the property characteristics and condition to be captured for collateral risk assessment. UPDs also record information about the property data provider and collector.
Submission to the GSE APIs generates a response to the property data provider letting them know if the UPD was accepted, or what issues need to be addressed for re-submission. For more information about the respective GSE property data API, see Fannie Mae Property Data API and Freddie Mac bACE API.
Appraiser direct hybrid appraisals can be received from an AMS today
Most AMSs allow an appraiser to select the type and location of assignments they will accept, including hybrid appraisal orders.
Once a hybrid order is received, the appraiser or AMS will request a UPD from an approved property data provider. The property data provider will receive the lender client name and loan identifiers needed from the appraiser or AMS to successfully submit the UPD to the respective GSE APIs. Then completed UPD files will be returned to the appraiser and AMS.
In more advanced systems, the UPD files will already be available to the appraiser in the AMS as attachments to the hybrid appraisal order they receive, much like other documents they receive from a lender when completing a traditional appraisal today.
Appraiser direct hybrid appraisals, like traditional appraisals, and are submitted to the GSEs Uniform Collateral Data Portal (UCDP), typically by the AMS.
GSEs recently published a UPD XML 2.6 specification
The GSEs recently published a UPD XML 2.6 specification to allow property data providers to deliver an XML file for appraisers to upload the data, images and floor plan into their appraisal software, and avoid rekeying & numerous individual uploads.
Can appraisers complete both the hybrid appraisal and UPD?
This is a common question and the short answer is ‘No’. However, appraisers can operate as property data collectors, and complete separate UPD assignments.
Appraiser direct hybrid appraisals are compliant with Property Data Collector and Appraiser Independence
Under GSE Appraiser Independence Requirements (AIR) and Property Data Collector Independence Requirements (PDCIR), lenders or an authorized third-party are required to submit the order for a hybrid appraisal or UPD respectively.
The GSEs appraisal modernization programs have (a) published an approved integrated property data provider list, and (b) require those approved providers to successfully submit the UPD to the respective GSE APIs before delivering to the lender.
Providing that lenders (and appraisers) utilize approved integrated property data vendors who successfully submit the UPD to the respective GSE API, these orders comply with PDCIR and AIR.
Payment processing is already in place
The same payment processing solutions that lenders and appraisers use today work for hybrid appraisals. Whether a lender collects payment from the borrower in advance for an appraisal, or later at closing, the appraiser will receive payment for the hybrid appraisal in the same way as for a traditional appraisal.
Property data vendors typically invoice lenders biweekly or monthly depending on completed volumes, avoiding the need for appraisers to become involved in UPD invoicing, payment remittance and accounting.
Lenders are already completing appraisal direct hybrids directly
MtgeFi customers report that appraisal direct hybrid appraisals were being place within a week of the GSEs authorizing hybrid appraisals in their selling guides.
GSE Selling Guide & Bulletins
The GSE bulletins and selling guide references are below: