Fannie Mae Announces Appraisal Tool for Lenders

New Tool Provides Increased Clarity, Certainty for Lenders to Help Prevent Repurchases

Keosha Burns

202-752-7840

WASHINGTON, DC – Today, Fannie Mae (FNMA/OTC) announced that it will make its proprietary appraisal analysis application available to lenders in early 2015, allowing lenders to compare appraisals against Fannie Mae’s database of appraisal and market data. The company currently uses the tool, Collateral Underwriter^™, to analyze appraisals when a lender delivers a loan to Fannie Mae. Collateral Underwriter will help lenders expand access to mortgage credit by providing increased certainty around repurchase risk. 

“Our goal is to provide relief on appraisal representations and warranties in the future, and we will work with FHFA to do so,” said Andrew Bon Salle, Executive Vice President, Single-Family Underwriting, Pricing, and Capital Markets. “We want to be the business partner of choice for lenders by providing the tools and products lenders need.  Collateral Underwriter will help lenders build their businesses safely and strongly.”

Fannie Mae began receiving appraisals in electronic format from lenders in 2012, and built Collateral Underwriter to analyze that data.  Collateral Underwriter leverages Fannie Mae’s market data and analytical models to perform a comprehensive assessment of the appraisal.  The tool provides an overall risk score and detailed messaging to highlight specific aspects of the appraisal that may warrant further attention. Collateral Underwriter will be integrated with Fannie Mae’s Desktop Underwriter^® software to seamlessly incorporate into a lender’s existing underwriting process.  Using Collateral Underwriter during the origination of the loan will allow the lender to assess the appraisal and address any issues prior to closing and delivery to Fannie Mae.

Collateral Underwriter is the latest addition to a suite of Fannie Mae industry tools, including Desktop Underwriter and Early Check^™, that help lenders make loans with confidence.  These tools help lenders identify eligibility issues earlier in the process, providing more certainty that loans will meet Fannie Mae’s requirements.