RCA
Elite Member
- Joined
- Jun 27, 2017
- Professional Status
- Certified General Appraiser
- State
- California
And I also agree with this:
Me: Who do you think should pay for the appraisal software and portal, the GSEs, the Appraisers, or Lenders?
Grok: "In a ground-up redesign of the appraisal system—as outlined in my prior response, with a centralized GSE-operated (or FHFA-supervised) portal for ordering, assignment, data submission, and quality analytics—the most equitable and efficient allocation of costs for the appraisal authoring software and the central portal would fall primarily on the GSEs (Fannie Mae and Freddie Mac), with limited pass-through to lenders and no direct charges to individual appraisers.
Current precedents align with this approach: the Uniform Collateral Data Portal (UCDP) and related tools like Collateral Underwriter are jointly developed and maintained by Fannie Mae and Freddie Mac under FHFA direction, with no transaction fees charged to lenders or their agents for submissions or access. The GSEs absorb the development, hosting, and operational costs as part of their infrastructure mandate. In a redesigned centralized system, this model should extend to the full portal (including appraiser assignment algorithms, payment processing, and audit trails), as the platform functions as essential secondary-market plumbing rather than a fee-for-service vendor product.
Me: Who do you think should pay for the appraisal software and portal, the GSEs, the Appraisers, or Lenders?
Grok: "In a ground-up redesign of the appraisal system—as outlined in my prior response, with a centralized GSE-operated (or FHFA-supervised) portal for ordering, assignment, data submission, and quality analytics—the most equitable and efficient allocation of costs for the appraisal authoring software and the central portal would fall primarily on the GSEs (Fannie Mae and Freddie Mac), with limited pass-through to lenders and no direct charges to individual appraisers.
Rationale for Primary GSE Funding
The GSEs derive the greatest systemic benefit from standardized, high-quality valuation data. They bear the ultimate credit risk as guarantors and securitizers of the vast majority of conforming mortgages. A robust, centralized platform ensures uniform data collection (via expanded Uniform Appraisal Dataset requirements), enables advanced risk analytics (evolving from Collateral Underwriter), supports alternatives to full appraisals (e.g., hybrids, desktops, value acceptance), and reduces repurchase risk through better pre-purchase quality controls. These benefits accrue directly to the GSEs' balance sheets and to the stability of the secondary market they support.Current precedents align with this approach: the Uniform Collateral Data Portal (UCDP) and related tools like Collateral Underwriter are jointly developed and maintained by Fannie Mae and Freddie Mac under FHFA direction, with no transaction fees charged to lenders or their agents for submissions or access. The GSEs absorb the development, hosting, and operational costs as part of their infrastructure mandate. In a redesigned centralized system, this model should extend to the full portal (including appraiser assignment algorithms, payment processing, and audit trails), as the platform functions as essential secondary-market plumbing rather than a fee-for-service vendor product.
Secondary Cost Allocation to Lenders
Lenders, as originators, would bear indirect costs through modest adjustments to their pricing or guarantee fee structures when selling loans to the GSEs. This could manifest as:- A small per-loan technology surcharge (e.g., embedded in the guarantee fee or delivery pricing).
- Requirements to use GSE-compliant authoring software that integrates seamlessly with the portal.
Why Not Charge Appraisers Directly?
Individual appraisers should not bear meaningful costs for the software or portal. Appraisers are independent professionals providing a regulated service; requiring them to pay subscription or per-report fees for mandatory GSE tools would erode net compensation, discourage participation (especially in rural or low-volume markets), and potentially violate principles of fair compensation under existing independence rules. In the current market, appraisers already purchase third-party authoring software (e.g., from vendors on the GSE Integrated Vendor List) at their own expense to meet UAD/UCDP standards. A redesigned system should provide free or subsidized access to compliant authoring tools via the central portal, treating this as infrastructure akin to standardized forms rather than a profit center.Potential Funding Mechanisms
- GSE internal budgets: Funded through guarantee fees, which cover operational expenses and credit risk.
- FHFA oversight: Ensure costs are reasonable and not passed disproportionately downstream.
- Minimal transaction fees (if needed): Applied only to lenders for high-volume or premium features, but kept low to avoid inflating borrower costs.
Bring your fishing pole... might even catch a fish.
