In Fannie Mae’s and Freddie Mac’s April UAD Update, the GSEs stated that the condition and quality rating and/or description of the subject, when it’s a sales transaction, should remain the same if used as a comparable in any subsequent assignments. (View UAD Update)
For many of us, this is newsworthy. Basically, the GSEs are telling us that once you select a condition and quality rating for a subject property that is a purchase transaction, and provide a description of the property, there is no going back. If you use the subject property as a comparable in a subsequent appraisal, the condition and quality ratings as well as the description must be consistent with what was previously stated. Likewise, once comparable sales are rated and described in a given assignment, those ratings and descriptions should be applied consistently in future assignments unless, of course, new information becomes available.
According to the GSEs, many appraisal reports currently demonstrate inconsistent condition and quality ratings and property descriptions from one assignment to another. It’s important to recognize that such appraisal reports are not in compliance with the GSEs UAD requirements, which also becomes a potential USPAP violation since GSE requirements are assignment conditions!
On behalf of ACI, we will be presenting a series of webinars about common UAD misunderstandings. We look forward to helping you improve your efficiency and maintain UAD compliance.