3.6 Policy Exception

[glenn walker]

OP says their a client so what forms did he submit prior appraisals on ?

A 2.6 or GPAR or their own forms. Hard to believe that Hay Seed Thrift doesn't have anyone in their facility that deals with appraisals unless they just do commercial or home equity lines etc.

 

[TerryRohrer]

It's a little premature to be "spiking the ball" when it comes to these extensions since they are on a case by case basis

I saw a comment by someone in the room with the GSEs yesterday. They reported that the GSE stance is that any lender who fills out the paperwork will get the extension. Not that that knowledge actually imparts any knowledge about how it will shake out. We are still mushrooms, but at least the BS is fresher these last few days!

 

[djd09]

The GSEs noted that beginning March 1, 2027, sellers still submitting UAD 2.6 appraisal reports will experience reduced functionality, including collateral risk scores of 999 in Fannie Mae’s Collateral Underwriter and 99 in Freddie Mac’s Loan Collateral Advisor, and loans delivered with UAD 2.6 appraisals during this period will not be eligible for collateral representation and warranty relief for value. UAD 3.6 becomes mandatory on May 20, 2027, with UAD 2.6 accepted only for resubmissions of previously submitted reports through June 27, 2027, after which UAD 2.6 will be retired. The GSEs stated that the exception is a one-time accommodation that will not be extended.

https://www.jdsupra.com/legalnews/fannie-mae-and-freddie-mac-announce-6467579/

 

[glenn walker]

No collateral representation and no warrantys using 2.6 is for lenders like you lost your auto insurance and no liability if you crash.

My guess is this pushes out many small to midsize lenders because they don't have resources to self insure and this may be the straw that breaks the camels back.

The money center banks and large lenders are adapting to 3.6 rather quickly. The hay seeds not so much.

 

[J Grant]

No collateral representation and no warrantys using 2.6 is for lenders like you lost your auto insurance and no liability if you crash.

My guess is this pushes out many small to midsize lenders because they don't have resources to self insure and this may be the straw that breaks the camels back.

The money center banks and large lenders are adapting to 3.6 rather quickly. The hay seeds not so much.

They have until March 2027, they will make it happen.

 

[glenn walker]

They have until March 2027, they will make it happen.

Agree !

 

[timd354]

It's been for sale for five years as his family doesn't want it. One of the best but a bad time to find any buyers. I wish him luck he's a good person.

Who would want to buy a residential appraisal software company right now? Unless the company has other sources of revenue, its upside is severely limited as there are only about 50 or 60,000 residential appraisers total and the appraisal software business is pretty fragmented among the competitors.

And here it comes, first “no exception” message from a client:


View attachment 112320

Some lenders may not ask for an exception, but I can tell you for a fact that any lender who does ask for an exception from the GSE's are going to be able to get it without much fuss.

 

[timd354]

It's a little premature to be "spiking the ball" when it comes to these extensions since they are on a case by case basis

While not every lender will ask for an exception as some are ready and are already delivering UAD 3.6 appraisals, any lender who does ask for one will receive it without much difficulty.

 

[adballirock]

Compliance person here. I'm CCO at a lender and CRO at an AMC, so take this with that in mind. I'm not here to sell anything. A few points straight from the GSE documents that may help with the "no exception" messages people are getting:

- The exception goes to each seller (lender) separately, and only if that lender requests it and is approved. It isn't automatic, and AMCs and appraisers don't request it. Only sellers do. So the same AMC can have one client on 3.6 and another still on 2.6.
- Lenders that don't sell directly to Fannie/Freddie don't request it either. They have to line up with their investors' plans.
- For excepted lenders, 2.6 reports submitted from March 1 through May 19, 2027 get a CU score of 999 (Fannie) or an LCA score of 99 (Freddie), and lose rep and warrant relief on value. New 2.6 submissions end May 19, resubmissions of earlier 2.6 reports end June 27, and 2.6 support ends June 28.

Practical point: if the engagement doesn't say which format the client wants, ask before you start the report. AMCs should be telling you up front, client by client.

Source (joint GSE doc): https://singlefamily.fanniemae.com/media/48191/display