Collateral Underwriter and the End of Time

Remember when Fannie Mae and others implemented the 1004MC, Market Conditions Addendum? How about the Uniform Appraisal Data set? What do these events have in common? Appraisers nationwide bemoaned that the end was near for appraisers and the appraisal profession. Okay, maybe the reaction wasn’t quite that dramatic, but human nature has a way viewing change as something negative. Anyone recall what was predicted to happen at midnight on January 1, 2000 and the pandemonium that proceeded? And of course, nothing really changed. It is too early to tell what effect Collateral Underwriter will have on appraisers and how they do things. Fannie Mae has expressed that if appraisers are doing things the right way, no effect will be felt. For those who practice poorly however, the end effect might be quite different. Judging by discussions on appraiser blogs and forums, most appraisers are getting feedback comments and about average CU scores.

No doubt, some students, especially in continuing education classes and advanced pre-license classes, may bring up the topic of Collateral Underwriter (CU). What is especially important to maintain when addressing the topic, is a professional and objective approach. The topic is not an opportunity for soapbox commentary. As well, many appraisers are considering acquisition of regression analysis programs and services to assist with appraisal development due to CU. The classroom is also not the place to endorse, or chastise any particular product.

In closing, I mentioned in the last newsletter that Fannie Mae had announced the intent to remove the preferred maximum net and gross adjustment (15%/25%) guideline from its regulations. It is now final, those guidelines no longer exist in Fannie Mae regulations in hope that appraisers won’t be guided by the guideline. There are a couple of textbooks that discuss the guideline. The reference will be removed at the next printing. Until then, please have students disregard the discussion.