By Rick Chirdon, Chief Appraiser | June 30, 2021
It should come as no surprise that with the current state of the market, field appraisers in the real estate industry are overwhelmed with work. The record appraisal volumes we have seen during this pandemic, combined with a declining population of licensed appraisers nationwide, has had a residual effect on both turnaround time for report completion and increased fees across the board.
As with the familiar scenario within the terms “Buyer” or “Seller” market, it appears we are in an “Appraiser” market. Appraisers can now be selective with the work they accept. Unfortunately, this causes certain appraisal products with lower fees, or assignments that may be more complex, to end up on the appraisers’ personal “not preferred list” of work. These unpopular products result in much longer turn times, higher fees, and/or the assignment to be turned down altogether.
One of the appraisal products that has recently been affected in the “Appraiser” market is the FNMA 2000 Field Review and the Desk Review products that are used by Fannie Mae approved sellers for mortgage quality control requirements. This appraisal reporting has recently seen increases in much longer turn times and fees for assignment completion – if the assignment is accepted at all.
The Fannie Mae Announcement
Last month Fannie Mae released updates to their guidelines regarding the field review and desk review products. Per the Fannie Mae Selling Guide Announcement (SEL-2021-04) on May 5, 2021,1 a lender, to meet the prior QC collateral risk assessment requirements, “must obtain an appraisal field review to evaluate the appraisal for 10% of the loans selected for QC review in the random sample. A desk review must be completed for the remaining 90% of the sample.” Fannie Mae has updated this policy to better align QC processes with available collateral data and industry-leading collateral tools.
As part of the updated requirements, Fannie Mae states: “the combination of standardized data and Collateral Underwriter® allows for a more robust QC process, which reduces or eliminates the need for a field review in most circumstances. Therefore, the new policy replaces the current appraisal QC requirements with a new collateral risk assessment for all loans selected for a QC review in the random sample.”
Fannie Mae has released this new product and announced that the intent is to assist lenders in performing the required post-closing appraisal review to streamline the collateral risk assessment process. The new product is known as the Post-Closing QC Collateral Risk Assessment Analysis (FNMA Form 1033).
The FNMA Form 1033 does not need to be completed by a licensed appraiser, thus solving one of the main issues in today’s “Appraiser” market. The reporting form 1033 can be completed by a qualified QC analyst or a collateral risk assessor which must be competent in appraisal theory and must be able to meet the specific reporting requirements.
Fannie Mae states that lenders can always order either a desk review or field review from a licensed appraiser when unable to complete an adequate assessment or appropriately determine the quality of the origination appraisal.
Providing the Quality Control Review
SingleSource understands the importance of staying up to date with the ever-changing guidelines and industry regulations. Our goal is to provide our clients with compliant products catered specifically to their needs. SingleSource is well equipped with qualified QC analysts able to competently meet the updated requirements for assisting lenders with completion of the FNMA form 1033, in addition to the appraisal field review or desk review when still necessary.
Our QC staff has an average tenure of over 8 years in the industry, and with our continuing education training modules, we ensure all SingleSource staff is always up to date on current regulations and best practices. Read our Post-Closing QC Collateral Risk Assessment Analysis (Form 1033) FAQ for more information on the form 1033 and our capabilities.
Contact us today to see how we can provide you with the FNMA form 1033 reporting you need to meet your new collateral risk requirements in a timely and affordable manner.
- Fannie Mae Selling Guide Announcement (SEL-2021-04) – May 5, 2021 https://singlefamily.fanniemae.com/media/25746/display