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UAD 3.6: Readiness Extends Beyond the Appraiser’s Report
by Laurie Egan
Much of the industry’s preparation for UAD 3.6 has understandably focused on the appraisal report itself. After all, appraisers need to learn a fundamentally different reporting format. Software providers need to give appraisers reliable tools for creating and transmitting reports in the new UAD 3.6 format. AMCs and lenders need to understand new data requirements and review processes.
All of that is necessary.
But there is another readiness issue receiving far less attention: Can all of the systems involved in an appraisal transaction successfully talk to one another?
For most assignments, an appraisal report does not simply travel from an appraiser to a lender. It passes through multiple independent technology platforms, each of which must correctly receive, interpret, process and transmit the data. Consider a relatively straightforward traditional appraisal ordered directly through an AMC:
Lender LOS → AMC system → Appraiser → AMC system → UCDP → Lender LOS
That represents six system-to-system handoffs.
Add an intermediary ordering platform between the lender and AMC, and the same traditional assignment may involve eight or more handoffs. Depending on the workflow, hybrid assignments can mean 12 or more system-to-system handoffs for a single appraisal transaction.
And the number of handoffs tells only part of the story.
“Appraiser” in the workflow depicted above is not one technology environment. Appraisers now have numerous UAD 3.6 reporting software options, each with their own mobile applications should appraisers choose to use them. Lenders use different LOS platforms. AMCs operate different management systems, sometimes more than one. Multiple intermediary ordering platforms connect lenders and AMCs. Property data collection providers have their own technology. Appraisers, AMCs and lenders may also use independent quality-control platforms.
Each additional system creates another point at which data, product types, statuses, attachments or workflow instructions must be interpreted correctly by the sending and receiving technologies. A perfectly compliant UAD 3.6 appraisal report can therefore fail to reach its destination for reasons having nothing to do with the appraiser or the appraisal report.
That distinction matters as the Nov. 2 mandatory UAD 3.6 submission date approaches.
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During Broad Production, industry participants are testing these connections in real-world environments and discovering the kinds of issues testing is designed to uncover. A report may successfully leave one system but remain in a workflow status that prevents the next system from retrieving it. A change intended to accommodate one client’s integration may require previously tested workflows to be reworked. A new data selection may need to be tested not only with lenders but also to determine how it appears to appraisers and other vendors downstream.
None of these issues necessarily means that UAD 3.6 itself is flawed. Nor does it mean that any particular participant has failed to prepare.
It means that UAD 3.6 readiness is an ecosystem problem to solve.
The GSEs have devoted substantial resources to helping appraisers and other stakeholders understand the new report and its requirements. That education is important and should continue. But as mandatory implementation approaches, the industry also needs greater attention on end-to-end integration.
It is not enough to know that an appraiser can successfully complete a UAD 3.6 report. It is not enough to know that an individual appraisal software platform can successfully create and transmit the required UAD 3.6 data package. And it is not enough to know that UCDP can accept one.
We need confidence that an actual assignment can travel successfully through the complete technology chain — from the lender placing the order, through every platform and service provider involved in delivering the appraisal, through UCDP and, ultimately, back into the lender’s system.
Testing each participant’s individual piece of the process is crucial but equally important is testing the entire transaction—from initial order placement through delivery of the completed report—across the many possible combinations of platforms involved. With the number of technology providers now participating in the appraisal process, the potential end-to-end technology combinations for UAD 3.6 transactions can conservatively reach into the hundreds or even thousands for a single lender/client. Across the industry, the number of possible configurations multiplies rapidly.
Nov. 2 is approaching quickly. The remaining Broad Production period provides an essential opportunity to identify and resolve these integration issues before UAD 3.6 becomes mandatory. We need to know not only that the appraiser’s report is ready and compliant, but that the entire ecosystem is ready to move it.
About the Author
Laurie Egan is a 40-year veteran of the appraisal profession whose experience spans appraisal firm ownership, chief appraiser, collateral risk, and regulatory compliance roles with both AMCs and mortgage lenders. She currently chairs a state appraiser licensing board and is a dedicated advocate for the appraisal profession.