FHFA, Fannie Mae, and Freddie Mac Announce Uniform Mortgage Data Program

Prime Alliance Solutions
June 1, 2010 | COMMENTS

The Federal Housing Finance Agency (FHFA) has announced that it has directed Fannie Mae and Freddie Mac to jointly develop and implement requirements for lenders to provide additional loan and appraisal data on the single-family loans we purchase. In response, Fannie Mae and Freddie Mac ( the government-sponsored enterprises [GSEs] ) have announced the Uniform Mortgage Data Program (UMDP) to provide a common approach to collection of appraisal and loan delivery data.

Fannie Mae's implementation of the UMDP falls under the umbrella of our previously announced Loan Quality Initiative (LQI). Through the LQI, we are working with our lender partners to promote improved loan delivery data that is complete, accurate, and fully reflective of the terms of the mortgage. The LQI will also help ensure that the loan meets our credit and eligibility standards, pricing guidelines, and other requirements of the Selling Guide or negotiated variances.
 
The common Fannie Mae/Freddie Mac approach to capturing appraisal and loan data, including use of the industry-standard MISMO format, builds on the principles referenced in Fannie Mae Lender Letter LL-2010-03: An Introduction to Fannie Mae's Loan Quality Initiative. The UMDP implements two of our LQI objectives – electronic submission of appraisal data and collection of additional loan data in an updated, industry-standard format – through a uniform approach that will facilitate lender adoption by having uniform datasets and file formats. The LQI continues to encompass several other activities that are Fannie Mae-specific and not connected to the UMDP.
 
Highlights of the UMDP include:

• A Uniform Appraisal Dataset that standardizes key appraisal data elements to enhance data quality and promote consistency (available in September 2010).
• A Uniform Collateral Data Portal (UCDP) for the electronic collection of appraisal data to minimize impact on lenders. The UCDP will replace Fannie Mae's Collateral Data Delivery (CDD) portal, and the same vendor has been engaged jointly by us and Freddie Mac to implement and manage the UCDP ( available in October 2010, and required for loan deliveries on or after April 1, 2011 that also have application dates on or after January 1, 2011 ). CDD will continue to be supported for early adopters until UCDP is available. Fannie Mae customers currently working on integrating to CDD will be transitioned to the jointly developed UCDP.
• A Uniform Loan Delivery Dataset that leverages the industry-recognized MISMO Version 3.0 standard ( documentation available in June 2010; required for deliveries on or after September 1, 2011 ). Working collaboratively, this loan delivery dataset has aligned Fannie Mae and Freddie Mac on the majority of the core data elements and their definitions. Where data differences persist, they are a matter of proprietary business or credit policy.  

The way Fannie Mae and Freddie Mac are working to jointly develop and maintain uniform mortgage data requirements is comparable to how we have worked together for a number of years on uniform mortgage forms and security instruments. Through the UMDP, Fannie Mae and Freddie Mac worked together to create a common approach that enables a better capture and understanding of the facts of the loans that are submitted for purchase and/or securitization through consistent and accurate data. Fannie Mae and Freddie Mac are independent companies with differing business approaches and strategies striving to achieve a common mission in an efficient manner that benefits the industry and consumers. Fannie Mae and Freddie Mac will each continue to develop and apply our individual and separate credit risk and pricing policies, analytics, and independent assessments of what the data means to loan performance and loan quality.
 
For additional information, refer to the UMDP Overview and FAQs on eFannieMae.com.

Reprinted with permission from the newsletter of Prime Alliance Solutions, a CUSO that provides tools and services for real estate lending.