Beginning on June 30th, the Uniform Collateral Data Portal (UCDP) will begin delivering new proprietary feedback messages for appraisals submitted to Freddie Mac, and will also return a proprietary hard-stop code that cannot be overridden. The Government Sponsored Enterprise (GSE) announced that the new proprietary messages are aligned with its effort to provide improved appraisal quality feedback.
Freddie Mac Proprietary Fatal Edit Messages:
If a lender currently receives the hard-stop code FRE800, Freddie Mac’s proprietary messages are automatically overridden and the code doesn’t prevent lenders from receiving a “successful” status when the appraisal is submitted to the UCDP. This all changes however on June 30th when the following Freddie Mac proprietary fatal edits are activated on all Uniform Appraisal Dataset (UAD) forms:
- FRE1086 Signature Date Check: Triggers if the signature date of the appraisal is before the effective date of the appraisal.
- FRE 1087 Appraiser Name Check: Triggers if the appraiser’s name is missing from the appraisal.
- FRE 1040 Subject Legal Description: Triggers when the legal description is missing.
Once these fatal edits are activated, lenders will begin receiving a new hard-stop code, FRE700, which will prevent them from receiving a “successful” submission status until the fatal edit that was triggered is addressed. They must then resubmit the updated appraisal to the UCDP in order to receive a “successful” status.
The GSE would like all participants to note that when these messages become fatal edits, the Freddie Mac submission status may differ from the Fannie Mae submission status in the UCDP. It is important to ensure that your processes are designed to accommodate these differences.
Appraisal Eligibility Messages:
The following four new feedback messages will be returned on all UAD forms submitted to the UCDP to complement the “Single-Family Seller/Servicer Guide” requirements that are related to appraisal eligibility:
- FRE1093 Condominium Zoning: Triggers if the Site Zoning Compliance Type is Legal Nonconforming and the Site Zoning Permit Rebuild to Current Density Indicator is “no”.
- FRE 1095 Subject Highest and Best Use: Triggers if the present use of the subject property does not represent the highest and best use of property.
- FRE1094 Sales Contract Review: Triggers if the contract of sale was not analyzed by the appraiser on a purchase transaction.
- FRE1092 Condominium Hotel Project: Triggers if the condo project name appears to be a condominium hotel.
The presence of these feedback messages may indicate that the appraisal and associated mortgage are not eligible for delivery to Freddie Mac. They will be implemented as warning messages and will not prevent lenders from receiving a “successful” status.
Appraisal Quality Messages:
Freddie’s new appraisal quality feedback messages will primarily focus on the overall completeness of UAD forms, and will initially be activated for only the Uniform Residential Appraisal Report (Freddie Mac Form 70). The GSE stated that it will provide sufficient notice as these messages are activated for additional and applicable UAD forms.
Although Freddie Mac anticipates these messages to be returned infrequently, appraisals with missing data do occasionally get through before being corrected. These feedback messages will serve to assist and build on the quality control checks that lenders currently have in place.
In addition, these new messages will only be implemented as warning messages and will not prevent lenders from receiving a “successful” status.
For more information on Freddie Mac’s UCDP initiatives, check out the GSE’s UCDP webpage.