These days, it seems technology increasingly affects every aspect of our lives, and the appraisal and mortgage underwriting industry is no different. There is now a dizzying array of software solutions for appraisers, reviewers, and lenders, including mobile apps, property identification solutions, more comprehensive multiple listing services (MLSs), automated valuation models (AVMs), risk analysis tools, automated appraisal reviews, and more.

In previous posts, we discussed how inflated appraisals can contribute to unsustainable growth in home prices, and we explored some of the regulatory changes being implemented in the appraisal and mortgage underwriting industry to help reduce those problems. This post discusses technological changes in the appraisal and mortgage underwriting industry that are being implemented to help reduce those problems.

In 2010, Fannie Mae and Freddie Mac, the government-sponsored enterprises (GSEs), established the Uniform Mortgage Data Program (UMDP) to standardize requirements for appraisal and loan data and improve data quality. This joint effort, undertaken at the direction of the GSEs’ conservator, the Federal Housing Finance Agency (FHFA), consists of multiple evolving initiatives:1

  • The Uniform Collateral Data Portal (UCDP) is a single online portal through which lenders must electronically submit appraisal reports for conventional mortgages to be delivered to Fannie Mae or Freddie Mac.
  • The Uniform Appraisal Dataset (UAD) provides common definitions and requirements for appraisal data, periodically updated.
  • The Uniform Loan Delivery Dataset (ULDD) provides common requirements for loan delivery data, still being phased in.
  • The Uniform Mortgage Servicing Dataset (UMSD) will define a standard dataset to facilitate data exchanges between servicers and investors with standardized definitions, formats, and valid data values.
  • The Uniform Closing Dataset (UCD) will provide a standard dataset to support the Consumer Financial Protection Board’s (CFPB’s) proposed Closing Disclosure form.

Through UCDP, lenders upload appraisal data, view status and findings, and modify submissions. Lenders are required to use the UCDP to submit electronic appraisal data files that conform to all GSE requirements, including the UAD, before the delivery date of the mortgage to Fannie Mae or Freddie Mac. This allows the GSEs to identify any issues and, if necessary, reject the appraisal before loan origination. Many technology vendors now offer integrated system interfaces to the UCDP.2

The UAD defines all fields required for specific appraisal forms and standardizes definitions and responses for a key subset of fields. Ultimately, lenders are responsible for reviewing the appraisal report and ensuring that the appraiser has provided all required data. When the lender uploads the electronic appraisal data to the UCDP, the portal performs checks to validate that certain data complies with the UAD requirements, and when applicable, the portal will return error messages if the data does not conform. UAD Compliance Check warning messages indicate that the appraisal was not submitted with the proper format or enumerated values, or the appraisal was not completed in compliance with UAD requirements. Lenders may need to contact the appraiser to clarify or obtain additional data to clear certain edits checks.3

While this standardization may help reduce errors, some have complained that technological development in the valuation industry has been too focused on appraisal report forms and not focused enough on market analysis. The development and integration of technology was a major topic at this year’s Appraisal Institute Stakeholders Forum, held on May 24 in Washington, D.C. Among other suggestions, participants recommended continued efforts to advance the integration of statistical analysis and geospatial capabilities into appraisals, particularly via appraiser and end-user education.4

But appraisers aren’t the only ones interested in statistical analysis. In July, the U.S. Department of Housing and Urban Development (HUD) solicited comments on proposed changes to the Federal Housing Administration’s (FHA’s) Quality Assurance Process. Proposed changes included using statistical sampling to estimate the defect rate of each lender’s FHA portfolio and then extrapolating the origination defect rate against all lender originations during the sampled period. Lenders would then be required to compensate FHA for the estimated total risk resulting from the lender’s origination processes.5

These are just a few of the many recent changes in the appraisal and mortgage underwriting industry, and the changes show no sign of slowing down. Anyone who wants to survive in this industry will need to be able to adapt, just as other industries have.


1 Fannie Mae. 2013. Uniform Mortgage Data Program (UMDP). Accessed at

2 Fannie Mae. 2013. Uniform Collateral Data Portal (UCDP) Overview. June 14, 2013. Accessed at
3 Fannie Mae. 2013. Uniform Appraisal Dataset (UAD) Frequently Asked Questions – FAQs. August 7, 2013. Accessed at
4 Appraisal Institute. 2013. “Technological Integration Critical to Future of Real Estate Appraisal, Forum Participants Say.” News & Advocacy, May 29, 2013. Accessed at
5 Schulman, Phillip L., and Krista Cooley. 2013. “Guilty Unless Proven Innocent: FHA’s Potential New Enforcement Regime.” K&L Gates Consumer Financial Services Alert, July 11, 2013. Accessed at–fhas-potential-new-enforcement-regime-07-11-2013/.