- 5 weeks ago
- #uad36
- #mortgagelending
- #valuation
But for lenders, it’s more than just a technical update — it’s a strategic shift that impacts workflow, risk management, and data intelligence across the lending ecosystem.
In our webinar, we’ll go beyond the standard overview to explore how UAD 3.6 redefines the lender-appraiser relationship. We’ll introduce new data opportunities, and how UAD 3.6 reshapes how quality and compliance are measured. Our sessions will cut through the noise and focus on what’s really changing, what you should be preparing for now, and where early adopters are already finding efficiency gains.
Join industry experts as we translate the complex language of UAD 3.6 into actionable strategies for lenders — helping you future-proof your operations before the implementation deadline hits.
What you'll learn:
What’s changing: The major data structure and terminology updates in UAD 3.6 — and how they impact the way appraisal reports are created and delivered.
Why it matters: The downstream effects on loan origination systems, QC workflows, and secondary market data consumption.
In partnership with: Accurate Group
#UAD36 #MortgageLending #Valuation
In our webinar, we’ll go beyond the standard overview to explore how UAD 3.6 redefines the lender-appraiser relationship. We’ll introduce new data opportunities, and how UAD 3.6 reshapes how quality and compliance are measured. Our sessions will cut through the noise and focus on what’s really changing, what you should be preparing for now, and where early adopters are already finding efficiency gains.
Join industry experts as we translate the complex language of UAD 3.6 into actionable strategies for lenders — helping you future-proof your operations before the implementation deadline hits.
What you'll learn:
What’s changing: The major data structure and terminology updates in UAD 3.6 — and how they impact the way appraisal reports are created and delivered.
Why it matters: The downstream effects on loan origination systems, QC workflows, and secondary market data consumption.
In partnership with: Accurate Group
#UAD36 #MortgageLending #Valuation
Category
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NewsTranscript
00:00I'm Allison LaForgia, and today I have two fantastic guests, Michelle Golden and Scott
00:08Ruder. And today we're talking about what everybody's talking about in the industry,
00:13UAD 3.6, but through a different lens, we're not just talking compliance, but operational
00:19excellence for mortgage lending and how lenders turn a required change into a competitive advantage.
00:26So first, let's meet who we're actually speaking with today. Michelle, let's start with you.
00:33Hi there, Michelle Golden, Chief Appraiser, Accurate Group. I've been here for three years,
00:38but 30 years in the valuation business. And we also have Scott with us.
00:45Hi, Allison. Thank you. And it's always nice being with Michelle. I'm Scott Ruder. I'm the
00:50Chief Appraiser and Single Family Director of Valuation at Freddie Mac.
00:56All right. Now, we have a lot to get through today, but I think a good place to start for
01:04this conversation is when you're talking to lenders and you're having these conversations
01:09with other people in the industry, how prepared do they feel for UAD 3.6?
01:16Michelle, you want to take that one first?
01:18Sure, I can do that. We have been serving our lender customers and asking them that very
01:24good question, right? How ready are you? And there's a lot of people that are letting us
01:29know that they haven't even had those initial conversations. So I think we have some that
01:34are falling into not prepared at all. 55% of the people we surveyed said that they were
01:42actually starting to have conversations, but then that gives like, you know, another 45 that
01:46haven't. So I'm really, really surprised at that because this is an all important topic
01:51that is coming. It's here. So that was, that was kind of surprising and getting that and getting
01:56that feedback that people are kind of just kind of waiting and seeing.
02:01Yeah. And we, we are very similar feedback, Allison, really. And, you know, we're a little
02:06step removed. Honestly, I would go to someone like Allison or many of our lender bank or sellers
02:11to kind of get a temperature on where they're at. And I think there's clear awareness. But I just
02:17think there's a, a, a bit of a sort of a latency on like where they're at exactly in the process in
02:24terms of, of, of getting ready. So it seems like there's a little bit of a gap between awareness
02:30and readiness, which I think pretty nicely brings us to our next point, which is why UAD 3.6 matters
02:39right now. Why does this matter right now? And isn't an eventually conversation?
02:47Yeah, I think this is a, I'll go first. I think this is a great slide that's largely in the, in the GSE
02:53space here. And the UAD 3.6 was a project really largely built around the need for and building a
03:04better data set data standard. So it's, it, it speaks to really needing better data earlier in
03:12the process. So a lot of times that starts with the appraisers. So that's been kind of the main
03:19drive and focus around the, the, the redesign. I think that putting those pieces into place took
03:26many years. You know, it's funny, we're interesting. We're recording this in, in January. I read
03:31recently that the, I think it was the Roman god Janus had sort of two heads, one looking
03:36back and one looking forward. And I think the month of January is actually sort of named in
03:41his honor, but the two faces do. They kind of look back to the past and they have one face looking
03:48forward. And I think that's a great kind of point to, to say, I believe that's really where we're at
03:53now. We can look back at all the, the hard work and all the effort that really the broader
03:59industry who participated in this has put in and then, you know, begin to look forward about the
04:05important steps ahead. I would say, you know, as a, as a, as a note, we're also very appreciative
04:11of the many industry partners and providers and appraisers who provided feedback and continued
04:20support for the initiative to, you know, help kind of deliver this data set, the data standard,
04:26all its benefits to the appraisal process. Michelle, I want to bring you in to talk about
04:32timing from an operational standpoint. Why would you say this is a conversation for now and not
04:39later? Right. I think if you, I think if you wait until later, there could be like a bottleneck
04:44at the end when we're, we're all pushing towards that, that November date, right? This is a good time
04:49to be testing us out. Interest rates are at a, at a reasonable level right now, volumes at a reasonable
04:55level where this is a good time to be testing that out. I've had a few conversations with
04:59some of our own customers about let's, let's try to work a few test orders. Maybe we're not going
05:04to be going live with it, but let's take somebody that's done a current report in the old format and
05:10try it in the new to see the differences. So I think it's all important not to wait to the last
05:14minute. Otherwise it could be like just this really bad bottleneck. What if interest rates go down?
05:19You know, we have seasonal peaks and things like that. So right now is an excellent time to partner
05:25and, and, and, you know, at least test that out for yourself.
05:28Michelle, would you say that there's a risk with waiting from an implementation timeline or even
05:36like a disruption or cost risk? I think all of those things, right. It, it could, it could end up
05:42like costing you and be very disruptive to, you know, all of a sudden you're needing to switch and you
05:47don't have the time or the talent or the ability to do that. You know, this, this is a lot of
05:52technical switching and things like that to where like maybe your tech support, you know,
05:56might not have the bandwidth. Maybe your company may not have the bandwidth. So I think it's, I think
06:01it's extremely risky to wait until, you know, Q3 with that customer survey that we did. There's,
06:08there's a lot of them saying, well, I'm going to wait till the, you know, the last quarter
06:11or up until that date in November. And I'm, and I'm imploring them to start sooner. Like, well,
06:16let's talk about your, your rollout plan in June. Can I, can I get you, can I get those ones that
06:22wanted to start in June? Can I get you to talk about your rollout plan now? So I, I think they're
06:26going to end up running into just a mess, quite frankly, you know, in operations and trying to get
06:33this through. And that feeds down to the customer. My goodness, we all want to make sure that we're
06:38supporting the customer through this and that it's a good experience for them. So that's, you know,
06:42that's my employment. It's let's, let's focus on the customer, make this a good experience for them.
06:47Now, I want to, we talked a little bit about the why now piece, and we talked about why this is
06:54happening briefly, but I want to push things back over to Scott and talk about some of the key
07:02objectives that we're trying to obtain here. Talked a little bit about timeline piece,
07:07that I think it's really important to talk about what the GSEs are actually trying to achieve and
07:15what the key objectives are with UAT 3.6. Yeah, that's a great, that's a great question,
07:21Allison. I think you've got a lot of the key kind of bullets there kind of highlighted. I think the
07:25first one is that data standard and that data consistency. I think that kind of runs as a through
07:30line across everything, particularly for us from a risk and risk management perspective. That
07:35transparency. So that, again, that structure and that, you know, being able to all utilize the same
07:44usable structure data has tremendous impact. So from left to right, there are reduced defects and
07:50variances. So where the, you know, and that begins a lot of times with the appraiser, the boots on the
07:56ground when they're collecting this data and, you know, being able to do it in a structured format
08:02where somebody like Michelle, her company, big lenders, sellers can then, you know, be able to
08:08have that clear line of sight. We ingest a lot of appraisals. So, you know, we can't hire enough
08:14review appraisers to actually read every report manually. So we do utilize systems and having that
08:22structured data really helps us to be able to get a line of sight across a, across a big volume of work.
08:28And again, everything else there, the, the automation, the workflow, and I think that, that, that strong
08:35level of data really across the ecosystem is, is so, so important. You know, to digress for a minute, we,
08:42we've heard a lot of chatter. I'm in front of a lot of industry stakeholders and particularly appraisers.
08:47And there's been a little sub-conversation about, you know, kind of a myth about, well, there, there's a lot
08:54more data points. There are. But, you know, that's going to then translate for me, the appraiser,
09:01into much more work and this more comprehensive assignment. And I think if you kind of take a step
09:06back and look at maybe just a general learning curve, I think there will be more time for appraisers right
09:11out the gate in terms of getting an assignment, doing it to the new standard. But I will say that
09:16a lot of the data, the expanded data set is we've really taken a lot of data that the appraisers would
09:25elaborate on in free form text and narrative in general addenda into structured format, right?
09:31So in other words, they, appraisers do a great job telling the broader story, but with the legacy form,
09:37they're like trying to jam that story into an old format. And so the team looked at, you know,
09:45data points that they were, data they were trying to share, broadband internet, pools, outbuildings,
09:51adverse site conditions, required repairs, a variety of things that they were putting in the narrative
09:57that now we've pulled out and just made discrete data think dropdown. So less writing, more clicking,
10:03learning curve. I think there'll be a lot of things from a practical perspective.
10:07I know that's not what the slide necessarily addresses, but I think it's an important point
10:11to say that was an objective and we did give that, you know, a lot of thought.
10:16So Scott, one thing I want to point to, and I'm going to say this more than once,
10:20reduces defects. Reduces defects, right? How many times have, you know, we've been looking at appraisals
10:28and we've been looking at situations from a lender lens, right? We don't want buybacks. We want to have
10:33good, clean reports. We want to have good information and this is going to disseminate it so
10:37much better. It's going to reduce defects, reduce buybacks, reduce so much pain because that is such
10:44a problem on the back end after the loans close, the customers long on their way, but then that is a
10:49pain point of the lenders. So this, this is a more transparent process. It's a more, you know,
10:56there's more information going out there. So I think that's very important for everybody to listen
11:01and get on board for the reduced defects. Yeah. The three Ds, the damage defects and deficiencies.
11:08And that would, that's one to sort of elaborate on your, your example that, you know, that's one
11:13Allison, right? We're an appraiser. Again, we give them a big blank, broad general addendum to provide
11:19all this commentary. Every appraiser does it a little bit differently and they'll put in commentary
11:23about observed condition, work needed, repairs needed, damage that was observed. And sometimes that
11:30maybe doesn't get back into the body of the report to actually make an adjustment or be able to
11:36support an adjustment consideration in the development of value. That's an inconsistency.
11:40Somebody like a bank is going to read that and say, well, you said it's as is and it's fine,
11:44but in your addendum, you go into a little bit of elaboration about all this work.
11:48So that will, it will eliminate, hopefully there'll be consistency and it'll eliminate that back and forth
11:54many times on revision requests. I would say coming with that to our appraiser friends, I think
12:03with greater transparency comes greater accountability. So our appraiser friends are going to need to be
12:09really careful that they're telling that broad and fulsome story and it's consistent from start to
12:14finish. And I think the data standard is they're working through the new data set is going to really
12:18be able to provide that structure.
12:21I want to move into elaborating a little bit more on what the net impact is for the broader appraisal
12:32ecosystem. Because I know that we've touched on a couple of things here about how things are going to be
12:38different for appraisers. But we've also mentioned a couple pieces specifically about how this, what the
12:46overall goals are and the aim to increase transparency and also reduce defects. And QC is something that I
12:55know lenders are always looking at. It might not be the most sexy talking point, but it's a really
13:02important one at the end of the day. So let's move into talking about the impact on the appraisal
13:10ecosystem and not just appraisers, but also tying in that lender piece and the AMCs.
13:16Right. So it's almost like everything the light touches, you know, for this process is going to
13:21impact. So I think you've got to kind of bucket it in there, but with the things we've been talking
13:25about, like with the appraisers, right, clearer guidance, clearer expectations, it's more structured
13:32for them. Like Scott was talking about, you know, gets rid of those lengthy addendums and that in
13:37turn, you know, kind of helps out the quality control process that you were mentioning, right?
13:42Some of the tools aren't ready and I think it's good, you know, for us right now as we're kind of
13:46reviewing the appraisals to get that muscle memory down to know where to expect those things in the
13:51report and not to think they're going to be found on some kind of lengthy addendum. So it's going to
13:56help streamline the process for the QC process for the lenders and for the AMCs, because there'll be
14:03an expectation of like, these are the fields and these are the areas and where we should expect
14:08those. These are required fields. These are optional. So, you know, it's everybody's kind of
14:14impacted, but kind of has to work together. And QC is almost like the one piece that kind of like
14:20threads it all the way through of making sure with each step along the way that the appraiser
14:25is doing a good quality report. The AMC, when they get that there, is receiving a good quality
14:30report and make sure that it meets the lender requirements. And then, of course, goes then on
14:34to the lender who provides it to the customer. So, you know, there's just a lot of things that we all
14:40have to coordinate together systematically. There's, you know, there's a lot of things that we're going
14:45to have to do to kind of test that out prior to launching, which goes back to the critical part
14:50about let's start sooner versus later. But it's just one of those, one of these items where it's
14:54like, it's not just impacting the appraisers. This then has downstream impacts to every component
15:01impact in the appraisal process.
15:04Yeah. And I would add to that, I think another big piece that impacts all the, really the
15:10stakeholders across the ecosystem is it provides a foundation for whatever innovation and
15:16modernization may look like going forward. So I think, again, it's just, it was, you know, the
15:21legacy form had its day. It provided a great, you know, great impact to the industry. It was important,
15:27but we're long, long overdue in terms of updating that. I think the great news for the industry is we're
15:33not introducing another static form. So with the static form came static certifications that you
15:39couldn't change. And, and it, it, it really limited a lot of, at least awareness of a lot of advances,
15:45innovation, and particularly in technology that we could entertain. It's not saying, you know,
15:50it can still support the traditional process soup to nuts on a 1004 form 70 equivalent, right? In the,
15:57in a uniform format, but it can also by not having a static set of certifications allow other things to
16:05happen. And I think the ecosystem, the, the, the broader stakeholder base, and I guess it starts
16:10really with the enterprises can really, you know, provide that, that foundation for further
16:16modernization based on this data set.
16:19I want to see, and both of you check me on this. To me, this reads as an entire system change and not
16:29just a single handoff in any of the individual areas, which I understand can be a scary process,
16:36but it also seems very exciting. And it also seems like this is really the absolute foundation
16:42of future innovations and modernizations. My, am I right there?
16:48Yeah, I would agree. Yeah. I'm having more conversation these days with, with my lender partners
16:53and, and actually boots on the ground appraisers. We have had a few reports come through for 3.6. So
16:59those conversations right now are key. What are you seeing? What is happening? So I think those
17:04conversations need to, to be happening and need to be happening more often so that we can all kind
17:09of get on the same page. And then, you know, it'll eventually, you know, kind of like settle in.
17:14But right now those, those conversations and, and discussing what we're seeing and being transparent
17:19is very important. Absolutely. And I think you hit the nail on the head, Alison. It is,
17:25it is not just, we're not changing one thing and we're not changing one system or rather one
17:31component. It is a system-wide change and it's a, it's a big change in the way of thinking, you know?
17:37So if you get an appraiser that kind of looks like me, right, you've been doing this a long time
17:42and you've known one way to do it and appraisers have gotten very proficient with the, the existing
17:49form and form and format that this is a dramatic change. You know, firstly, gone are forms.
17:56You know, the assignment used to start with going into your software, you know, going across the
18:02suite of forms, selecting the form, pulling up and filling out the form. That's gone. You're not
18:06filling out a form anymore. You're interacting with data and a data set dynamically.
18:10And the format that that resulting report will take will be in some structure. But that's a big
18:18change. So I think, you know, every, and I enjoyed, you know, kind of talking to Michelle prepping for
18:25this, that I think every, every point kind of looking in at this has got their own element of
18:30that sort of big realization of that system-wide change you talk about, right? So it's appraisers
18:35getting used to a whole new system. AMCs have a whole new way of developing
18:40everything, right? In terms of assessing all their impacts across technology, looking
18:45at everywhere, you know, they may, assessing their vendor readiness. So it's, it's going
18:52to be a big deal. But anyway, long answer to your question, yes. System-wide change, not
18:58a single handoff, like, oh, I'll get my software update and I'll be good. No, this is, this
19:02is very, very different.
19:03It's a commitment. It is an absolute commitment, but I think it's worthy.
19:06Yeah. Long overdue.
19:10Now, Scott, in your last answer, you mentioned changes for appraisers and AMCs, but I want
19:16to talk a little bit more about changes for lenders and specifically the concerns that they
19:22have. So let's talk about concerns for actual implementation. Michelle, let's start with you
19:31and conversations that you've been having with lender partners.
19:34Right. So going back to the survey that we did in the fourth quarter of last year, the
19:39two biggest points that came out from that, where they were concerned, our lender partners
19:44were concerned with appraiser adoption and then technology integration, right? Technology
19:49integration is like a really big component of that. You got to make sure the pipes are working
19:53and things, the appraisals are flowing through. Appraiser adoption is starting for me to become
19:59less. With the reports that we have, we put together for UAD 3.6 here, the appraisers that
20:06we're talking to are ready. They want to do this. Now, not all the software providers, not all the
20:11process providers are ready, but the ones that are ready and they have been testing, the appraisers
20:16have been testing with that. They've been really good partners, patient, very patient partners with us
20:22in trying to get the appraisals completed. So, you know, obviously this is also a change in
20:28workflow that we've been talking about and that they have to, that, you know, lenders have to figure
20:31out. And that's where it's like they're relying on technology and, you know, their IT teams and
20:36everything to kind of get that completed, you know, in a reasonable amount of time. But, you know,
20:43that's starting to come along as well. I know that right now, turn times will probably be longer than
20:50what we anticipated. So, again, that word patience kind of comes along, right? People are asking,
20:55what's the turn time? What are the fees going to be? Two things, those are the two things that have
20:59to develop over time as they get comfortable with the process. It's going to take us a while to
21:05establish those customer and reasonable fees for a process like this that is so new. So, I just ask
21:11for patience as we kind of go through that. But, you know, those are like the, like really the four big
21:16things that, you know, that we've been hearing from our lender partners. And, you know, obviously
21:20at the end of the day, they want to have a compliant process. So, you know, when they get, they have,
21:26you know, they get, get through audits and things like that. So, you know, everybody wants to be
21:30compliant. What does that look like in this new, in this new world? So, it's, it's a matter of let's
21:35patient keeping those, those avenues and those channels open to, to talk through and then, you know,
21:42just time, time and patience. Yeah. And I would, I would say some, you know, some early returns are
21:50kind of in from the appraisers that have done many of the first few. And like you might expect,
21:55there's sort of mixed reaction. A couple of appraisers just overrided the deep action, right?
22:02I mean, they just sort of embraced it, did it, worked through it, acknowledged it was, you know,
22:06it took a little bit longer, but I've never done this before. And I think two different appraisers that
22:11might've done a couple of the first two or three, one used and leveraged some technology. One did
22:17everything by hand and just kind of transferred or typed information in and did it that way.
22:23So, and then you hear on the other end of the spectrum on social, somebody did their first one
22:28and they couldn't get to the keyboard quick enough to sort of bemoan how long it was. And this is
22:34awful. And I, you know, I'm like, well, I get that. I really do in all sincerity, but also do your
22:40second one, do your fifth one, do your 10th one, you know, get, we are reacting to that very first
22:47one, which, which is likely going to be very painful. The other thing in terms of adoption,
22:53I think from a lender perspective is, and I'm kind of a step away from that. So I get most of my
22:58information just from when we have our client and seller calls and we talk with some of the AMCs that
23:04appraisers that do the fulfillment is I would say if you're in a lender shop, we've heard some best
23:11practices. One I heard that I loved was designate an executive sponsor and put one person on kind of
23:19driving this. You know, the old joke about if you tell two people to feed the dog, the dog may likely
23:25not get fed because I thought you did it and you thought I did it and that type, you know, so we don't
23:30want that little finger cross and pointing going on in terms of, gee, I thought somebody else was
23:35looking at, no, one person accountable. Think of everywhere the appraisal touches in your process
23:40and that will allow you to assess the impacts to the technology and the people and the processes that
23:47Michelle talked about and then ensure vendor readiness because everybody's got different
23:52platforms that they may use and have different integrations and then test it end to end,
23:56right? Just make sure it kind of works. So there's all kinds of tips that we can share and
24:03from my perspective, I do it with a lot of respect to say banks are smart. They know what they're doing,
24:07but just to Michelle's point, there are ways we can avoid a third quarter 2026 collision where
24:15everybody's scrambling at the last minute and then guess what? Then you're going to be in line
24:19probably with one of your vendors and then it's just all that is going to stretch.
24:23Yeah. Let me touch one more thing on the customer, Scott, you know, that we're talking about here
24:28where I think that the lenders need to focus on as well is, you know, the experience of the property
24:34could be different, right? We have appraisers who, we have this experience as well, some showing up,
24:40taking notes like they've always done to do their inspection and then we've had some show up with,
24:46you know, like their iPad and scanning and things like that. There could be a fundamental shift
24:51at what the appraisers are doing when they're out there to do the inspection. If some of them are
24:56doing their normal process, they might be at your house like about 30 minutes or an hour,
25:00but if they're doing it, taking on some of the new technology and actually completing some of the
25:05fields as they're going along with the appraisal, they could be at the house a little bit longer
25:09than inspected because there could be a shift of like, where is the appraiser doing some of their work?
25:15Are they, you know, go ahead and validating the quality condition while they're there? Are they using their notes
25:20when they go back to their office to validate that condition rating and that quality and doing more
25:25of the work at home? So some of that stuff could then, you know, shift out into the field where
25:30appraisers might be spending a little bit more time. So I think it's going to be key to ready your
25:35customer into what to expect when somebody comes out to the home, if they see them, you know,
25:40scanning, you know, with, you know, using tools and technology, you know, to kind of be prepared. I think
25:45it's always good to prepare your customer no matter what about the appraisal process, but this is a
25:49complete change. So from stem to stern, your appraiser, your customer needs to know what to expect.
25:56I want to underline a point that both of you made in that appraisers are already running with
26:02this. And I think that's a really, really good point because I feel like sometimes you don't give them
26:07all the credit that they're due. So just wanted to underline that for a second as we talk about
26:12lender adoption. But I also want to highlight that these concerns to me seem very valid, but they also
26:18seem like operational challenges and not structural problems. And this might not be the best analogy,
26:25but it sort of seems very similar to the new iPhone software update that just got dropped. There were a lot of
26:32people who hated it for the first couple days, and gradually got used to it, you figured out where all the
26:38different things are, you figured out how to use the new interface. And there's been, there were a lot of very
26:44intentional changes that were made. So to me, it seems like a lot of very intentional changes that
26:49were made to improve the overall process that might feel and look a little bit different for
26:54different people at different points in time.
26:58Yep. I think it's a great analogy, man. And I was one that didn't like it the day it dropped. So,
27:04but yes, that I bit my tongue and took longer to find everything. And yeah, I think it's a good
27:12comparison. So, let's talk a little bit about what that actual day-to-day looks like. So, sort of
27:19on the lender side, what this actually means for them. So, Michelle, walk us through the operational
27:29changes and day-to-day from lenders. Right. And just a little bit of background. I have been in,
27:35I've been, you know, in some lending background, some large, some large banks and stuff, but we've
27:40had to kind of set up processes based off of, you know, new things that may have come along in the
27:44industry. So, I know like one of the first things you want to do is getting those playbooks ready,
27:48right? Review your workflows, your process and everything to make sure that you have those playbooks
27:54for all the users. You know, training as well is very important, but training alone isn't the only
28:01thing that's going to kind of get you going. You're going to have to actually kind of run through
28:04those tests and those different roles. But then what this ends up giving you, and this is one of
28:08my favorite phrases to say, and I love lean management, this gives you a sustainable, repeatable
28:13process, right? This gives you the ability to know that in the appraisal, everything's going to come
28:19through pretty much static with the required fields every time. You're not going to be hunting and
28:23packing through an addendum, trying to find the answers to the questions that you need.
28:28If you're looking for the highest and best use analysis, it's going to be right in that section.
28:32All those boxes are going to be checked with the information, not being, oh, not enough room
28:36because it's squeezed in there with the site section and I have to go rolling into an addendum.
28:41So, it really gives you that sustainable process. And then with that cleaner report, it makes it easier
28:46to read, but then also to be able to implement those technology tools. Now, first off, and I've said this
28:53in a lot of the conversations with the lenders, because a lot of those technology tools aren't
28:57quite ready yet to read the U83.6, like reviewing those yourselves, using the appendices that are on
29:04the Freddie Mac site to kind of help you review that. So, that way, you know what to expect. That way,
29:09you can validate what your technology, your AI, your tools that you're going to use to review will be
29:17able to kind of help you. But it should be able to give you then, you know, a process you can automate
29:23and do tiered reviews, do like a waterfall in, you know, how you kind of, you know, create that review
29:29process. So, it should then also then for you create less revisions. So, that's really important
29:36in timing, right? In order to get the information from the valuation over to your lending division so
29:44that they can, you know, proceed with the loan. Cutting down a matter of days, you know, is important
29:50to that customer experience. So, I think that, you know, once you kind of get settled into the process,
29:56I think you're going to find out that it's quicker, it's cleaner, it's sustainable, it's repeatable,
30:02all those wonderful lean management words that we all love. And I think that, you know, once we get past
30:08the learning curve, I think that it is going to be, you know, a lot less, a lot less friction with this
30:14process. So, I've known Michelle a long time and it's evident we both have been six-sigmatized at
30:21some point in our past with lean and six-sigma principles and I couldn't agree more with the
30:28sustainable, repeatable, transparent process. And I would say all the points she made, Allison,
30:36and I think there's the other side of that is the appraiser lens looking at the very same points
30:41too, right? Nobody benefits more than lower revision and retouch rates than appraisers. It's one of the
30:48many things I hear from, gee, there wasn't a comment about this and you didn't touch it. Yeah, I did.
30:54It was buried in page fill in the blank on the addendum and they couldn't find it to, you know, candidly,
31:01you know, appraisers are very good at building efficiencies into the process, but we want to be
31:06real cautious. They're not building efficiencies and cutting actual appraisal development out of
31:11the process. There's ways you can gain efficiencies and I think over time I'm convinced this data set
31:16will. But again, I said earlier at the risk of repeating myself, I think with greater transparency
31:21is going to come greater accountability for the appraiser. They're going to need to be able,
31:26that report is going to need to withstand the light of day and there's going to need to be a
31:32consistent through line with, you know, with not sending the reader on a little hide and seek for
31:37information. And what you said at the back of the report should be the same at the beginning of the
31:42report. And a lot of the structure of the data, there's going to be a whole discrete section as an
31:46example for the, any damaged repairs, defects to the property that's readable right out the gate. You can see
31:53what it is, see that the appraiser considered it, the appraiser can share whether it's, it's as a
31:59measurable impact or whether there's a value consideration that they were able to, to provide
32:05an adjustment for. So, so anyway, I, I amen to everything. I think day-to-day for the lender
32:11also translates pretty clearly over on the other side to day-to-day for the appraiser as well.
32:16So let's talk about what an operational win looks like with UAD 3.6. What does success really look
32:28like and what operational choices make a difference? Yeah, I, I think the, the, the very win will be
32:36successful implementation, right? I mean, all that standardization that comes with the, the flexibility
32:41that the structure provides, I think is the biggest win, right? Getting, getting appraisers on the front
32:47end, accustomed to that, you know, that dynamic interaction with the data to that standard set,
32:55then carrying forward to and through, you know, if, if an appraisal management or a company or someone
33:01else is used to facilitate and fulfill that order to their processes of review to the lender,
33:08and then eventually to, to Freddie or Fannie. So, you know, that standard view, I think is going to
33:15be one of the, one of the biggest wins. Michelle? Yeah. Yeah. I mean, you know, for me, just going
33:21back to what we talked about, reducing defects, right? So we have a standard process, a standard data
33:26set, a standard expectation. It's, you know, you know, very clear of what the, what the appraiser is
33:33supposed to be doing. And that then trickles down, but, you know, that just, you know, like, it's like
33:38the last bullet point strengthens investor confidence, you know, through consistency,
33:41right? And, you know, that's, that's one of the things that we focus on is we want to make sure we
33:45have good reports, clean, supportable reports, and that will help kind of reduce the defects. But
33:51no, I, I think this is, this is going to be a game changer for us.
33:56So we just defined really what success looks like and what the operational win is here with
34:05actual implementation. Let's go back to the early adoption piece and talk about why early adoption
34:13matters.
34:18I'm glad we're circling. Yeah. I'm glad we're circling back to this, right? It's like, Hey,
34:21we said, we said a lot of words. We started out with the, Hey, let's, let's, let's become early
34:25adopters. We said a lot of words that try to convince you. It's like, here's our, here's
34:29where we're driving home our selling point here with early adopters, right? Before the
34:34volume spikes, let's work together to test and refine the process. You know, I think we
34:40can avoid a lot of last minute, you know, mishaps if we can, you know, get in there and
34:44kind of test this out. And, you know, before interest rates drop, before we have those seasonal
34:50changes. So I think it's absolutely, you know, time to start working on, you know,
34:55like it's showing here, mapping out those workflows and training your staff and just
34:58kind of getting ready for this to, to, to kick off. Don't wait, start now.
35:05Yeah, I would a hundred percent agree. We, we talked a little bit, we, you know, we
35:09talked from time to time too, and there's no really good, like carrot or incentive
35:12other than just having the discipline to do it. It really is. You know, we joked on an
35:18earlier call, you know, the first week of April is a bad time to start thinking about
35:22putting your taxes together. Right. Cause you know, that deadline's looming. You're
35:25going to be in a scramble. You know, if you use some accountant or some support
35:31there, everybody's going to be buried down the line. That's a, that's a bad move.
35:36And, you know, I'm guilty of it as the next person of certain things that seem far
35:41out in the future. Oh, you know, mandatory is not till November. My goodness, I'm old
35:47and we will blink and it will be October. So, so that time will pass. And to Michelle's
35:54point, just, you know, yeah, make, there are so many benefits that we can't talk about
35:59it enough. If there are hiccups, there's a whole reason, well, let me, let me, I just
36:03thought of this, right. It's a whole reason the GSEs had limited production before we
36:08had broad production is to test everything and to learn what we can learn and get one
36:13file in and then two and then five and then 10 and just, you know, be able to make sure
36:18the workflow worked the way we wanted it. We were able to do, you know, gives you time
36:24to do sufficient training. I see, I think training the staff here on this sheet is, is, is
36:28huge. You're going to have people that like appraisers and like everybody else in the
36:32ecosystem has been used to doing it one way. That one way is gone. It's not just being
36:37modified or tweaked. It's gone. So yeah, I just, we echo a lot of, we,
36:43sing off the same choir sheet here a lot. I would just think there's a lot of good
36:48reasons to, to really early adopt and put that plan in. And, and I, and I 100% get
36:54it. It's not a flaming issue right now. It's like a lot of the innovation and the
36:59alternatives that both enterprises have, you know, they're really, really good when
37:04times are busy, appraiser capacity is stretched and you've got lower risk loans
37:09that would qualify. But if you, if you haven't set really invested the time and
37:15the money and effort to get, to get that, that workflow set up the minute, the
37:20wave hits is not the right time. So anyway, I think we've, we've kind of hit the
37:25point pretty heavily here, but I think, you know, early adoption is, is really,
37:28really key.
37:29I also love that both of you gave like really great logistical operational
37:34standpoints. This would be like, to me, like a stressful, very bad adoption
37:39experience doing it last minute. Like it would be grudging. So I would personally
37:46be on the, like, let's get this done a little bit early. Let's feel, let's all
37:50feel good about it. Let's not be really stressed in our execution. Cause there's
37:56nothing worse than like facing a deadline and being like, seeing that time
38:01take away. And then being like, it's October.
38:07Yeah. Guess what next month is it's, you know, mandatory UAD. Yeah. And I'll just
38:14make a quick plug. And if you were going to get to it, I apologize. The both
38:18enterprises have put out, the joint UAD team has put out a lot of great
38:23resources, candidly, almost more than you can handle, but go to, you know,
38:27Freddie Mac UAD readiness and you will go to the UAD site for Freddie Mac, all
38:35kinds of resources there. One that sticks out and I think it pertains to this
38:38conversation is a lender readiness kit that the joint is talking about in terms
38:44of, you know, Michelle can do this with her left hand, but, you know, we talk about
38:47mapping all the workflows, assessing the impact of technology, you know, all the steps
38:52to ensure vendor readiness and some of the things we've talked about, but, you
38:55know, encouraging our lender or sellers to, you know, use that as a guide, use
38:59anything there as a guide, but that's one in particular that if you need something
39:03in black and white, there it is. And you can hand that off to that executive
39:06sponsor or who's ever going to be on point for this to say, Hey, are we, are we
39:11okay? And what do we need to do now to ensure that we're, we're going to be ready
39:16and we can test properly. And I'll give a shout out to that, that's 17 training
39:21modules that you created. That was the best training I think you all have ever
39:25put together. It goes step-by-step through each section of the appraisal and
39:29it's, it's not appraiser speak, right? It's, it seems to be lender directed and
39:33very easily digested and understand. So absolutely love that training that you all
39:37put together. Good, good deal. Let's talk about it. Let's talk about what building
39:44internal readiness looks like. What should lenders focus on internally to
39:49prepare? Michelle, I think this is it. This is, this is a you question.
39:54Here we go. Yeah, definitely, definitely mapping out those, those workflows, right?
40:00Cause it, it, it could be changing. I mean, you could be looking at like a tiered
40:03review system here and then identifying, you know, systems and everything in which
40:08it flows into. So it's, it's, it's basically, you know, doing really good product
40:13mapping at this time to make sure that you've got kind of everything covered.
40:17Let's talk about your lean management, you know, identifying those, your RACI,
40:22who's responsible, accountable, consulted and identified, right? Or informed, excuse
40:27me. But, you know, you have to keep, keep kind of like moving through the process of,
40:32you know, updating your documents and your guides and keeping everybody informed.
40:36Those playbooks are so important. And then of course we were talking about training and,
40:40you know, there's some great, you know, appraisal sources out there for training and
40:46some great companies. But then on the GSC website, as, you know, Scott was discussing,
40:51you know, on, on Freddie, they've got some really good documentation, some appendices,
40:56some sample appraisals. So, you know, making sure that everybody understands the new elements.
41:01There's an outline called appendix F1 that'll take you through, you know, each section of the
41:07report and the expected answer, what's required, what's not. So I have C1, appendices C1 and F1
41:13open on my desk all the time now as we go through reviewing the appraisal. So, you know, it's just a
41:18matter of kind of walking through, establishing your process, getting that, that project manager
41:24established and walking through to make sure that they've got everybody identified, you know,
41:28through who's, who's responsible and who's going to be accountable for these things and kind of
41:32walk that through. So a lot of things that need to be taken care of, just, you know, not just within
41:40like a valuation department, if you happen to have that, somebody reviewing, but the entire,
41:44the entire enterprise from, to make sure that this gets, you know, the process gets through and tested.
41:51And then of course, your final end user, your, your customer.
41:55Now, I think a natural segue here is to also recognize that there's a whole piece of this,
42:03that is also the technology integration and partner piece. So after we look at that internal
42:12readiness, what should lender or how should even lenders think about the technology and partners
42:18portion of this? Right. I think, I think this is a good time to look through some kind of a
42:23waterfall process based off of your risk, right? You can set those things up to, to look at, you
42:29know, do you actually need a full appraisal to be completed for, for this particular assignment?
42:34What is your risk? What is the purpose? You know, what are you, you know, what is the lending for,
42:38for this one and kind of establish those workflows, you know, because it could be something you could
42:43be doing the, you know, a hybrid process with, you know, they have the, the property data collection
42:49reports that have been a tremendous lift in time and in money to the customer that have been kind of
42:56implemented. So, you know, this is again, an opportunity to kind of relook at, you know,
43:01how your workflows are going when it comes to, you know, the need for products. And then of course,
43:07you know, you want to look at those tools and technology that you may use, may need to help
43:12partner with, you know, with, with other companies and stuff to see how can I, how can I make my,
43:18my process as such to where I can cut down on those errors? How can I, you know, have some automation on
43:23top of this where I can, you know, have, have it, you know, QC stuff for me or have it then work with
43:30that waterfall to see, okay, what's the proper route for this report to be reviewed? And again, you know,
43:36in all this and establishing this, this is going to help you be compliant because when you have that
43:40automation, there's less, you know, human error to say, oh, that the handoff or the pass should be
43:45here. It helps you then kind of in your compliance department of making sure that, you know, based
43:51off of this risk score or, you know, what have you, you know, set in your policies and procedures
43:56that you're, you're compliant and following the right process. So it's really important to, you know,
44:03partner and look into the tools and technology and try to decide what, what your workflow should now
44:09look like for valuations as a whole. So definitely helps you get, you know, just operational readiness
44:15is really important and to be, to collaborate, you know, with a strong company.
44:20Now, I also want to recognize that this is the current big hurdle, but there's also a piece that
44:30you both talked about, about how this is the foundation moving forward. So let's zoom out for a
44:38second and talk about how UAD 3.6 really sets the stage for the long-term and the future.
44:48Yeah, I can take a stab at that first. I think it's a, it's a great question because I think it is very
44:53forward-looking to the earlier reference. I think that this data standard and data set does set that
44:59foundation to the, to the, to the comment that it is foundational and not final. And I think it's,
45:06it can more continually keep pace with valuation, not only just valuation, innovation and
45:12modernization, but also give us at the enterprises a greater line of sight into what may be driving
45:19value. Right. So the more, again, through the earlier example that, you know, there's a lot of
45:23those, there's a lot of unstructured data in the, in free form text that I think appraisers are telling
45:30a very meaningful story that we don't really have a line of sight on in terms of, you know,
45:35seeing that in any structured format. As we begin to get to see that, whether it's, you know, we used,
45:41talked about pools and outbuildings and broadband internet and maybe waterfront details, energy
45:46efficient packages. We'll get a whole line of sight into what might be driving value, number one.
45:51And two, over time for, with put a risk lens on that, we may see where we have maybe opportunity to get a
45:58little more aggressive with rep and warranty relief or other aspects that, you know, would really
46:03benefit lenders. Like, you know, Hey, homes with fill in the blank have, you know, very, very, very low
46:09delinquency and, and, and buybacks. Well, that may fit into a broader risk conversation to, to really,
46:16to their benefit. So again, right now, that's a big part of the story that we don't know.
46:21So, so I think to your point, Alison, great question. I think there's a lot of future
46:25of valuation that kind of hinges on this and it lays the foundation. And again, as things change,
46:32you know, in the, one of the things early in the conversation seven, eight years ago was broadband
46:35internet. Oh, that's a big thing. We need to capture that in communities where we don't have it.
46:40And that's true, but I'm just picking on this. I don't have any background information other than
46:45to say, be starting, or maybe some brand new thing that'll make broadband sort of like old, you know,
46:51we might laugh about it now. Like, Oh, remember we thought that was important. Well, then we can
46:55change to whatever the latest thing is. We'll add that as an enumeration and then appraisers can
47:00start capturing it and saying, you know, look, people are really up, they're really, you know,
47:05paying additional money and it's really adds value to, to property. So anyway, that, that then will be
47:11just a change to the data standard. Nothing else changes. You put in a change order, you implement it,
47:15and then you, you, you continue to move forward. Yeah. I, I, I think, you know, it's kind of TBD
47:21with as much data that you're, that's going to be collected now, because, you know, like you were
47:24alluding to the accessory dwelling units and other things, you know, they were just pretty much like
47:28a line on the, on the, the, the adjustment grid or just like a little blurb in there. Now we're going
47:35to be getting the size, the, the, you know, the condition, the photos of the interior, a lot of
47:41information about some of these additional features, which were quite frankly, at times,
47:45causing some of those overvaluation flags, right. And, you know, not, not having that being kind
47:52of captured and kind of baked into, to the models. It's like, well, now we're going to have that
47:56information. It's like, how, how is that going to then refine it so that we don't see that. So
48:01then that values are, you know, kind of better dialed in and we're not getting as much questioning
48:05back to us or, you know, the, like those really high scores of, you know, this is an overvaluation
48:10and there's a problem here when it's like, well, when I look at it, I don't see there's
48:14a problem. It just has a bunch of little extra outbuildings and a, and a pool and some other
48:18things. So I think this is, this is going to, you know, just keep refining and more to
48:23come as we, you know, get to digest a lot of this information. So, but, you know, see the
48:29future is very bright. I see it as, you know, being more automated. I see appraisers as being
48:34used and implemented carrying forward to, in order to, you know, interpret what these
48:41tools and what this information is saying. Cause I think there was a little bit of a
48:44fear from appraisers that, you know, they're going to be replaced to the contrary. That
48:49is not what is going to be happening. It's like, we need the appraisers to interpret the
48:53results in which we are seeing and, you know, to provide that information. So I just wanted
48:58to kind of, kind of throw that out there, you know, in case there's somebody listening is
49:01like, oh, they're trying to replace us. It's like, no, actually in the future, we still
49:06need you vital. Kind of, kind of need you more than ever. Yeah. You know, and that's
49:11part of the broader discussion. We've, we've kind of pivoted on the fact that appraisers
49:15within an assignment identify the highest and best use of a property. And we've kind of
49:19captured that phrase and say, you know, turn that into the appraiser as they look at an
49:23assignment, where is their highest and best use? And you can take that across to every
49:27step. It's not saying they can't do certain things. They do a lot of, they do all the
49:30steps very well from collecting data on, but is that where your highest and best use
49:36is? And to Michelle's point, I think it's in that analysis, it's interacting with all
49:40this data. It's helping us understand what's going on in markets that are also
49:43dynamic. So the data is just going to structure the story. The appraisers are the ones that
49:48are going to need to analyze and translate that story for us. So very important.
49:51I want to move over to final thoughts and share some resources. To me, this has been an absolutely
50:02fantastic conversation. It seems like this is really an opportunity and that's how the industry
50:08should be thinking about this. And it really, UAD 3.6 looks like an upgrade to the entire life cycle,
50:18but I will let you all chime in with your final thoughts and any additional resources that you'd
50:25like to share. Go ahead, Scott. Okay. I think you've hit a lot of the key ones there, Allison,
50:31and we've talked about many, right? Just the drive for early adoption, I do believe is critical.
50:39I think there likely is a competitive advantage sooner than later. The one thing none of us know,
50:46and certainly I'm at the front of that line, is once we start to get kind of a core amount of
50:523.6 appraisals coming in and appraisers have already done the hard cut from the legacy 2.6 over
50:58to 3.6, how many, and it's a question, I don't know, you know, how many are going to want to dance
51:03in both platforms or is it going to be, look, I've already got new 3.6 software. I'm getting
51:08proficient here. I'm kind of getting a run under me. That's all I want to do. And then,
51:14so it's a classic kind of chicken. And where does it start? I mean, so lenders need to be ready,
51:19I would think, at some level in however they fulfill those internally or externally. You know,
51:23all those systems need to kind of be ready to go. So I guess in a long way, it winds all the way back
51:28to competitive advantage to say, if you're ready to go and the world's changing to 3.6 and you're
51:33ready, then you're ready. Even though we will accept 2.6 up until 1st November, that might not be
51:41a great strategy. Yeah, that just goes back to the early adoption is critical, right? One of the
51:48bullet points on here for sure. And, you know, I don't want anybody to think they're on an island.
51:53Scott and I are very approachable. You know, just please reach out if you have questions. We're here
51:58to support. And really, I think in just, you know, talking to, you know, like our other industry
52:04partners, everybody's very approachable. And really, we're all really moving the same direction,
52:08wanting to get this done. But it is important that you take those initial steps and get going
52:14on the process so that you can find out where your pitfalls may be internally, right? But again,
52:19we are absolutely here to support you in anything that you may need through this process.
52:24Yeah, and I'll just add quickly on this slide. Firstly, thanks to our friends at Housing Wire.
52:30You guys are really, you know, provide a lot of leadership here too. And I know this is an
52:34important issue. So we appreciate the platform. Yeah, Michelle and I work together a lot as we do
52:39across, we partner across the industry. And so, yeah, approachable 100%. And a couple of the inset
52:48resources there, I would really, you know, encourage folks, appraisers, lenders, vendors,
52:55whomever across the ecosystem, utilize the GSE resources that are out there. And really ensure
53:06that you're, you know, kind of up to date ready, and help you formulate your questions, if nothing
53:10else, that you're going to have internally, and then you can really move forward from there.
53:15To anyone who's listening, and maybe isn't on the page, we're going to have all of these linked on
53:19the landing page that this video is going to be posted on. So you will have the resources for
53:24the Accurate Group UAD 3.6 readiness page, and the Freddie Mac UAD 3.6 resource page, as well as
53:33a couple of the other things that Scott and Michelle pointed out throughout this conversation.
53:39But I want to thank you both so much for joining me today. I appreciate you both spending an hour at
53:48this point going over UAD 3.6. Before we started recording this, I mentioned that the current top
53:55trending article on HousingWire right now is out UAD 3.6. It really is the topic of the day. It's
54:03something that there are a lot of questions about. And there are so many resources that are out there
54:09on getting you prepared for it. And with that, Michelle, Scott, thank you so much.
54:15Yeah, thank you, Allison. The door's always open. So yeah, but thank you very much. Appreciate it.
54:20Thank you. Really appreciate it. Thank you.
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