TheMReport — News and strategies for the evolving mortgage marketplace.
Issue link: http://digital.themreport.com/i/539233
Th e M Rep o RT | 7 take 5 Digital Age Like the GSes before it, the FhA has now mandated electronic appraisals—find out what you need to know about the eAD portal. the June deadline. Lenders should make sure their valuation management software provider or AMC is starting to work with establishing integration with the EAD system now. Your loan origination system vendor should also be working with your valuation software provider to en- sure a tight integration is established prior to the June 2016 deadline. M // What are Global DMS' plans to help its clients make the transition to using the EAD portal? Bien-AiMe// We've already done a lot of the development work from when we introduced the GSEs' UAD and UCDP; our clients are familiar with how to use our eTrac software, and we have solid relationships with our integration partners, such as LOS vendors. We do not anticipate that our clients will be significantly affected in terms of a learning curve. Our technical support and training teams are well-versed in how the EAD technology functions, so getting questions answered quickly won't be an issue. M // In general, how do you think this will affect the way FHA appraisals are handled, accepted, and insured? Bien-AiMe// We (Global DMS) feel that FHA joining the data initiative really helps solidify the standard and will bring more efficiency throughout the entire industry. The EAD portal will provide a highly effective way for the FHA to accept files, check, collect and enforce requirements. If all technology providers work well with the FHA, it's going to be a huge positive. Manual submissions will be virtually eliminated (some minor excep- tions will remain, at least for now). We're going to see FHA appraisals reviewed and processed quicker, more efficiently, with better qual- ity, and with a cost savings. Figuring out how you are going to submit appraisals to the EAD portal next year is pivotal. You don't want to wait until the last minute. By early 2016, you should understand how your technology will work and establish a plan. This month, MReport sat down with Vladimir Bien-aime, who has more than 20 years' experience working in the appraisal space, to get his perspective on the FHA's new Electronic Appraisal Delivery (EAD) portal. The EAD portal was announced in a March Mortgagee Letter released by HUD. With the portal, the FHA is following the lead of the Government-Sponsored Enterprises (GSEs) in making the submissions of appraisals electronic, and this greater adoption is sure to have a profound impact on the mortgage industry. The EAD portal allows mortgagees, their authorized users, and/or their designated third-party service providers to electronically deliver all FHA origination appraisal reports prior to endorsement. Use of the EAD portal will be required with all FHA case numbers assigned on or after June 27, 2016. As president and CEO of Global DMS, a leading valuation management technology provider, Bien-Aime is the perfect source to detail the ins and outs of this new system. M // The industry has heard quite a bit about the FHA's plan to start using technology to accept and review appraisals to insure FHA loans. What's involved with the new EAD portal and how will it work? Bien-AiMe// The portal is cur- rently live for testing, but as of right now, organizations are not required to submit appraisals to the FHA using the EAD system. As of June, 27 2016, however, appraisals must be submitted through the portal. As soon as mortgagees receive access credentials from the FHA and validate that they are ready to use the new technology, they can began delivering appraisals through the EAD portal. Appraisal reports can be submitted two ways through EAD: They can either use the system's interface that allows up to 10 appraisal reports to be uploaded at a time, or they can establish a direct system-to- system integration with the EAD portal that will enable large-batch uploads. Once an appraisal is uploaded, mortgagees will be provided with a confirmation of successful submission, or they will be informed that the appraisal requires correction and resubmission. M // Do you see any adoption challenges with the new EAD system? Bien-AiMe// No. Basically, the FHA is doing what the GSEs did a couple years ago. The FHA has had the luxury of being able to learn from and leverage how to accept and process electronic appraisals as a result of the heavy lifting that Fannie and Freddie already did, using the Uniform Collateral Data Portal (UCDP). The EAD will utilize the exact Uniform Appraisal Dataset (UAD) that the GSEs do. Appraisers are already accustomed to work- ing with reports in the UAD format, and lenders and AMCs have incorporated electronic appraisal delivery into their business processes. As a result of the similarities between the two systems, understanding and adopting the new electronic ap- praisal report submission process will be smoother than when the UCDP was originally launched, so it's going to be significantly easier for entities to conform to FHA appraisal submissions. M // From a technology perspective, what should lenders and other entities who will have to use the portal prepare for? Bien-AiMe// It's important to start using the portal well in advance of next year's June re- quirement. Vendors are preparing now; lenders should plan to start testing their utilization in early 2016, so that they are ready for