January 2016 - Out of the Woods

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TH E M R EP O RT | 31 FEATURE When submitting an appraisal, the EAD portal will either provide confirmation of a successful sub- mission or information regarding required corrections that need to be made before resubmission. Once an appraisal is successfully submitted, data sharing between the new por - tal and FHA Connection (FHAC) will allow for the population of certain data fields on the FHAC Appraisal Logging screen. The FHA has advised lenders to note the following: • Appraisals submitted through the EAD portal remain subject to a review for compliance with FHA appraisal requirements. • Mortgagees remain responsible for proper underwriting of the appraisal and for ensuring the property meets the FHA's minimum property require - ments and standards for serving as security for the FHA-insured mortgage. • The appraiser remains ac- countable for appraisal quality, credibility, and compliance with FHA appraisal requirements. The FHA states that there are three main EAD portal roles: 1) EAD User, 2) EAD Read-Only User, 3) EAD Administrator. Depending on the role and per - missions the mortgagee has been granted, users can access the portal to submit, search, correct data errors and omissions, and view the appraisal report. Per the FHA, the mortgagee's appointed EAD Administrator is empowered to add users, manage the user's access rights, change passwords, change user roles, revoke user access, and establish designated third-party service provider relationships. Don't Wait V endors and lenders had to devote a lot of time and resources over the past year to prepare to comply with the new TILA-RESPA Integrated Disclo - sure rule that went into effect October 3, 2015. If not already started, it is important to now focus on integrating the new FHA appraisal process into your workflow. Figuring out how you are going to submit appraisals to the EAD portal should be a prior - ity. You can submit directly to the portal or by way of a third-party technology provider. Lenders should make sure their valuation management software provider or AMC is already start - ing to establish an interface with the EAD system. Loan origination system (LOS) vendors should also be working with their valuation software providers to ensure tight integrations are established. Again, this shouldn't be as involved as when the GSEs mandated use of the UCDP because the systems are so similar and the same technol - ogy vendors will be working with the FHA's submission platform. It's notable that the FHA isn't stopping at its EAD portal. It will also start enhancing or adding other technologies, such as when electronic signatures on most loan documents was introduced in 2015. Adoption of e-signed promis - sory notes and the development of an electronic case binder to replace paper-based files are also planned. The FHA's Computerized Home Underwriting Management System, which has been the FHA's insurance endorsement system of record for more than 30 years, will also be upgraded in phases. So be prepared for a number of new FHA technology changes in 2016. EAD adoption rates are expected to be high and system issues to be low. Still, it's important to start us- ing the portal now. Lenders should begin planning their own timelines to test the system, establishing their own internal processes and proce- dures, assessing staffing needs, train- ing staff, working with investors, and involving necessary vendors for a smooth launch. In order to start using the EAD portal now, mortgagees just need to register for and participate in the FHA's on-boarding process. Registration transpires within FHAC. VLADIMIR BIEN-AIME is CEO and Co-Founder of Global DMS, the award-winning pioneer of Web-based appraisal process management software and a provider of technologies used across the mortgage process. He is an appraisal compliance expert with specific knowledge of the most current federal, state and local appraisal- related regulations, including the Dodd-Frank Act and new Interagency Guidelines, as well as initiatives such as Uniform Appraisal Dataset and Uniform Collateral Data Portal. For more information, questions, and guidance, lenders can visit It's notable that the FHA isn't stopping at its EAD portal. It will also start enhancing or adding other technologies, such as when electronic signatures on most loan documents was introduced in 2015.

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