Since October 12th, Fannie Mae’s Collateral Underwriter (CU) has been operating under new guidance, which restricts who can view the application’s data. This restriction, along with others, was recently outlined in Fannie’s Collateral Underwriter Schedule (for non-seller/servicers) bulletin.
Restrictions on Use:
A lender’s right to access and use the CU application, along with its associated documentation, shall be conditioned upon their compliance with the following:
a) A lender shall limit the use of CU, including its reports, output in print, or other methods of collectable data, as it relates to the management of collateral risk and the protection against or prevention of potential fraud, unauthorized transactions, claims, or other liabilities.
b) The lender shall not use CU, including its reports, output in print, or other methods of collectable data, for credit evaluation, making a credit decision, or to interfere with the independent judgement of an appraiser.
Third Party Access:
Fannie Mae’s bulletin also provided the following clarifications in regards to third party access of the CU application:
- A lender may not provide third parties with access to CU or allow them to use the application on their behalf – including appraisers, AMCs, and technology vendors. However, technology vendors may be granted access to the CU application if the lender receives written permission directly from Fannie Mae.
- Lender’s may not provide AMCs or appraisers with copies or displays of Fannie Mae reports that contain CU findings – including, without limitation, the CU Print Report, UCDP Submission Summary Report, and the CU section of the DU Underwriting Findings Report. However, a lender may still reference CU’s data when conversing with an AMC or appraiser in regards to a recently submitted appraisal report.
- A lender’s technology vendor may not disclose, aggregate, or distribute CU findings, messages, or reports that contain CU findings or messages to third parties.
- A lender’s technology vendor may not use CU findings or messages for any purpose other than assisting the lender with their management of collateral risk and their protection against or prevention of potential fraud, unauthorized transactions, claims, and/or other liabilities.
- Lenders will be held fully responsible for the consequences of their technology vendors’ actions in regards to exceeding the outlined limitations listed above.
It’s important to note that a lender may still provide copies and displays of Fannie Mae reports that contain CU findings to potential purchasers and other interested parties of the subject loan.
Since CU’s inception, there have been numerous discussions over weather appraisers and AMCs should have access to its reports. However, the clarifications outlined in Fannie’s bulletin show that the GSE doesn’t want CU information to be shared outside the actual licensee of the product – the lender. Fannie Mae does not want the lender to share reports and data with AMCs or appraisers, and it doesn’t want technology vendors who work with lenders to have direct access to CU or to collect any of the information provided by the application.
For more information on CU’s new guidance, check out Fannie Mae’s Collateral Underwriter Schedule (for non-seller/servicers) bulletin.
For more information on CU in general, check out Fannie Mae’s official CU webpage.