Fannie Mae's Collateral Underwriter Information

This document explains what a la mode is doing in response to Fannie Mae's Collateral Underwriter.

Document 9001  |  Last updated:  01/29/2018 RR2

What is Collateral Underwriter?

Here's what Fannie Mae has to say about what Collateral Underwriter is:

Collateral Underwriter (CU) is a proprietary model-driven tool developed by Fannie Mae that provides an automated appraisal risk assessment to support proactive management of appraisal quality.  Fannie Mae will make CU available (…) to provide transparency, and help lenders more effectively and efficiently identify issues with appraisals.

Source:  https://www.fanniemae.com

Basically, what that means is that Fannie Mae is using Collaterial Underwriter to verify that the information they are receiving is as accurate as possible.  In fact, Fannie Mae has been using Collateral Underwriter for quite some time — now, they're simply exposing it to the lender to reduce the back-and-forth between the lender and Fannie Mae.

Collateral Underwriter will not produce more complicated questions than you’ve already been receiving from your clients.  On the contrary, with Collateral Underwriter, you’ll likely get fewer, better, and more relevant questions because it’s based on Fannie Mae’s UCDP appraisal data instead of some third‑party system that doesn't know quite what Fannie Mae is looking for.

What is a la mode doing to help with Collateral Underwriter?

As Fannie Mae has stated in the Collateral Underwriter FAQs PDF, their current requirements and expectations for lenders are not fundamentally changing.  Therefore, we don’t feel expectations for appraisers are changing.  And we will not capitalize on unfounded fears over a tool that has yet to be released.

Appraisers that make a good faith effort to use the most similar comparables, provide accurate and consistent data, and support their adjustments with market data and analysis can generally expect a minimum of Collateral Underwriter feedback that would cause a follow-up request from the reviewer.  Collateral Underwriter’s analysis may in some cases help the lenders’ appraisal reviewers better understand the appraiser’s rationale and possibly reduce back and forth between the lender and the appraiser.

Source:  https://fanniemae.com (PDF)

As always, our E&O review rules help point out many possible inconsistencies and UCDP errors.  And we’re constantly improving — we’ve flagged 8 of the new Hard Stops.  To see the full list of new Hard Stops, click here.

Additionally, check out SmartAddress in TOTAL.  It's a free tool which helps you ensure you're consistent with your property data from report to report.  (And if you're not in TOTAL yet, click here to learn how to upgrade from Aurora for free.)

For more in depth information on Collateral Underwriter, click here to read a memo from a la mode's owner and Chairman, Dave Biggers.

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