What is really happening with CU? How does it affect you?
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I report the facts, plus my opinions on what it means for you.
– Not all loans go to Fannie Mae – Freddie, VA, FHA, jumbo, etc. do not.
– Lenders are not required to use CU.
– Fannie guidelines, including CU, are the minimum. Lenders can add their own.
– Gradual implementation of CU’s web based interface, which has the list of the “20 comps” suggested by CU. This information is not available to AMCs or appraisers.
– Some appraisers get few or no appraisal warning message and some get on a lot of them, depending on their clients.
– A new Fannie Letter (dated 2-2-15) specifically tells lenders to manually review the appraisal warnings before sending any to appraisers.
– CU sends out warning messages for adjustments on only 6 factors: GLA, lot size, view, condition, quality, and location. For example: GLA adjustment for (comp x) is smaller than peer and model adjustment.
– CU warning messages for “data consistency”: the 6 factors above. Plus, CU also looks at consistency, not adjustments, for 6 additional characteristics: quality rating, condition rating, total below grade areas, finished basement areas, above grade bedroom count, and above grade bathroom count. For example: “The condition rating for (comp x) is materially different than what has been reported by other appraisers.”
– Per Fannie, there is no direct relationship between AQM and CU. However, Fannie uses data analytics like those seen in CU to find patterns of behavior. AQM decisions are not based on automated results. Humans are required.