According to FHFA, the nation’s two largest mortgage financiers have been working closely with other industry players, including seller-servicers and appraisers, to develop uniform standards for collateral, borrower, and loan-level data submitted to the GSEs. The input provided has been used to develop the Uniform Mortgage Data Program, described by the FHFA as “a long-term, joint effort” to improve the data collection processes and ensure consistency in data definitions.
“FHFA directed the enterprises to undertake the development of the standards to provide greater uniformity in the data they collect,” said FHFA Acting Director Edward J. DeMarco. “This initiative is a major step toward meeting industry requests for uniformity in appraisal and loan data. Improvements in data quality will benefit all mortgage market participants and strengthen the housing finance system.”
According to FHFA, not only will the program streamline data submissions for appraisers, mortgage lenders, servicers, and other information providers, but a common framework will enable Fannie and Freddie to manage risk more effectively.
The Uniform Mortgage Data Program will be deployed by the GSEs in phases, through a common platform, and provides for continued stakeholder input as Fannie and Freddie will be gathering additional input from market participants as the program rolls out.
FHFA also noted that the planned changes have been structured to leverage most existing originator and appraiser technologies and to facilitate increased use of electronic-based forms and documents in the mortgage process.
Under the program, data submitted to the GSEs on loans sold to or guaranteed by them will include more complete and consistent data on loan characteristics, borrower information, the property securing the loans, and the identity of the parties involved in the transaction.
“Fannie Mae and Freddie Mac will continue their own proprietary reviews of appraisal and loan information, using their own unique business models and policies,” DeMarco explained. “However, we asked the enterprises to work together to implement a common data protocol that will ultimately benefit borrowers, lenders, and other market participants. Common data definitions, electronic data capture, and standardized data protocols will improve efficiency, lower costs and enhance risk monitoring.”
In a statement issued Monday, Fannie Mae advised its servicers, “Under the umbrella of our Loan Quality Initiative (LQI), Fannie Mae previously announced that we would require electronic submission of appraisal data, require additional data about the loan at delivery, and transition to the industry-standard MISMO format for delivery of loan data. The [Uniform Mortgage Data Program] does not replace the LQI, but rather it implements two of our LQI objectives — electronic submission of appraisal data and collection of additional loan data in an updated format — through a uniform approach with Freddie Mac.”
Freddie Mac’s CEO Charles E. Haldeman, Jr. issued his own statement, praising the new initiative as an “important effort.”
“The importance of data quality to the mortgage market’s long-term success makes this the right call at the right time,” Haldeman said. “We look forward to working closely with FHFA and Fannie Mae on this important effort to improve appraisal and loan data quality and help make homeownership opportunities more sustainable through various market cycles. We will keep our customers well informed of our progress to ensure that they have sufficient time to adapt to the new data standards.”
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