Government-sponsored enterprise (GSE) Fannie Mae has announced a new appraisal analysis application for lenders, Collateral Underwriter, which will be available early next year.
Fannie Mae says the tool will allow lenders to compare appraisals against the GSE's database of appraisal and market data. The company currently uses the tool to analyze appraisals when a lender delivers a loan to Fannie Mae. Collateral Underwriter will help lenders expand access to mortgage credit by providing increased certainty around repurchase risk, the GSE explains.
Andrew Bon Salle, executive vice president of single-family underwriting, pricing and capital markets, says the tool "will help lenders build their businesses safely and strongly."
"Our goal is to provide relief on appraisal representations and warranties in the future, and we will work with [the Federal Housing Finance Agency] to do so," he says.
Fannie Mae says it began receiving appraisals in electronic format from lenders in 2012 and built Collateral Underwriter to analyze that data. The tool leverages Fannie Mae's market data and analytical models to perform a comprehensive assessment of the appraisal.
It provides an overall risk score and detailed messaging to highlight specific aspects of the appraisal that may warrant further attention. Collateral Underwriter will be integrated with Fannie Mae's Desktop Underwriter software to incorporate into a lender's existing underwriting process. Using Collateral Underwriter during the origination of the loan will allow the lender to assess the appraisal and address any issues prior to closing and delivery to Fannie Mae.
Collateral Underwriter is the latest addition to a suite of Fannie Mae industry tools, including Desktop Underwriter and Early Check. These tools help lenders identify eligibility issues earlier in the process, providing more certainty that loans will meet Fannie Mae's requirements, according to the GSE.