Freddie Mac: Quality & Condition Ratings

[J Grant]

As far as I know, the PDC collectors do not express a condition or quality rating about what they inspect because that would be construed as an opinion.

If appraisers are expected to assign a Q or C rating based on third-hand information, the appraiser is at increased risk of getting it wrong. Even good photos and exhibits are not a replacement for personally inspecting a property.

Inspecting a house is more than collecting "data." It allows the appraiser to have a hands-on touch and see what is there and not there. It also allows the appraiser to hear traffic or another sound, see how the subject site relates to what is around it, how the subject conforms or not to the area, what the comps are like, and talk to people on site to get more information, etc.

 

[George Hatch]

That can all be true and yet can also be subordinate to the lender's own minimum expectation at the same time.

You never heard of an appraiser getting yoinked for a 2055 where they only saw 30% of the exterior of the structure. Nor di you ever hear of a reviewer getting yoinked for missing something in the appraisal they were reviewing that turned out to be wrong but which was otherwise completely invisible to an outside reader or reviewer.

Whether a lender's decision to engage/use "less" was wise or foolish, nobody can say they were somehow unaware of the additional risks involved in the decision that they made by their own hand.

As for your last paragraph I wrote an article saying exactly that and more which got published in one of the industry mags a couple years back. And have repeated these points on this forum a couple times. Heck, for all I know you might have gotten that talking point from me. Or not. So I obviously agree with what you're saying there.

 

[NC Appraising]

newrez ace pdr freddie ma pdf - Google Search

The property data collection must represent that the property:
o Does not have safety, soundness, or structural integrity issues.
o Is not in C5 or C6 condition.
o Is not Q6 quality.
o Does not have significant items of incomplete construction or renovation; and
o Meets Freddie Mac’s property eligible requirements (see Freddie Mac Selling Guide 5602.1)
• To make the above representations and warranties in the absence of an appraisal, the Correspondent
Client must examine the descriptive information, floor plan and photo exhibits from the property data
collection to determine whether the property meets all of the Selling Guide requirements.
• The PDR contains a data set that must be reviewed to determine if the subject property meets Freddie
Mac’s eligibility requirements. The property data collector must also specify when the subject property
has any required “repairs or alterations” or will require an “inspection” by a trained professional
when the property data collector cannot make the determination if repairs are needed.
• For PDRs completed with required repairs or alterations, a Completion Report performed by a property
data collector must be obtained, that verifies the repairs or alterations have been completed. The
Completion Report must contain all the data points and certifications in the Completion Report data set
(Addendum C) and the Completion Report certifications (Addendum D). The Completion Report must also
include photos of the completed repairs or alterations.
• For PDRs completed with an inspection required to identify if repairs are needed, a licensed professional
trained in the particular field of concern (for example but not limited to, a structural engineer, plumber,
pest inspector) must perform the inspection of the property. The inspector must provide either:
o A signed report that includes their license number stating the repair(s) is not required or
A signed report or invoice that includes their licensing number stating the repair(s) has been
completed and the issue corrected.

 

[NC Appraising]

ACE+ PDR

ACE+ PDR (automated collateral evaluation plus property data report) is one of our collateral valuation offerings that allows lenders to originate eligible loans without an appraisal. Additional property information is physically collected on-site by trained data collectors using the Freddie Mac...

sf.freddiemac.com

v2.0 will be accepted. The above link takes you to an example.

• PDR Dataset Samplepdf

The ones that I have seen the inspectors rate it c1-c6 just like we do.

 

[Parham93]

Imo the ratings ( and their explanations) are pretty good. However, there should be a plus or minus sign we can add -


C3, or C3-. or C3+ , because there are variants within a condition or quality of a property. We can adjust for it within a condition or Q rating, but assigning a plu, minus or leaving it middle would help explain it.

This was one of the reasons they went with a tiered rating system.. there was something like 500+ variations of condition found being used in reports that were reviewed prior to the UAD

 

[DWiley]

George, you have stated that the data collects assigned ratings; please verify that with D Wiley or someoby who can verify it I did find the above from Fannie were it references a lender looking s at the photos and the lender decides about a C 5 or C 6 - I do not believe the third party collectors assign ratings but it is something that should be clearly stated - or are they deliberately not doing so - -

The Uniform Property Dataset (UPD) that as adopted by the GSEs does not include C ratings. The intent was for the data collector to collect sufficient information to allow the appraiser to assign a condition rating - similar to how appraisers have long used third party data (e.g., comments and photos in an MLS listing) to assign ratings to comps.

Having said that, "hybrid" or "bifurcated" appraisals have long been used for appraisals for things other than GSE originations, and there is no requirement to use the UPD for non-GSE work. So, there may be other types of property data reports, used for non-GSE purposes, that do have C ratings. I am not aware of any, but it is a possibility.

 

[NC Appraising]

The Uniform Property Dataset (UPD) that as adopted by the GSEs does not include C ratings. The intent was for the data collector to collect sufficient information to allow the appraiser to assign a condition rating - similar to how appraisers have long used third party data (e.g., comments and photos in an MLS listing) to assign ratings to comps.

Having said that, "hybrid" or "bifurcated" appraisals have long been used for appraisals for things other than GSE originations, and there is no requirement to use the UPD for non-GSE work. So, there may be other types of property data reports, used for non-GSE purposes, that do have C ratings. I am not aware of any, but it is a possibility.

Thanks for clarifying. Technically, they won't give a c rating, but per the form on freddie website, it appears that they will be giving their opinion of the condition of components. Similar to external influences, etc.


Or maybe some were not filling out the form correctly....and placing C4?



Here is an example of a non gse form. I had other examples that cam by email in there training videos but they removed them.

https://nan-AMC.com/propertyconditionreport/

https://nan-AMC.com/wp-content/uploads/2022/07/SAMPLE-REPORT-PCR-EDITED.pdf

 

[NC Appraising]

Is any of the below incorrect? Pdr and their clients are making bank on these reinspections...they tried to say that appraisers were just finding things to things to make money from reinspections...



The property data collection must represent that the property:
o Does not have safety, soundness, or structural integrity issues.
o Is not in C5 or C6 condition.
o Is not Q6 quality.
o Does not have significant items of incomplete construction or renovation; and
o Meets Freddie Mac’s property eligible requirements (see Freddie Mac Selling Guide 5602.1)
• To make the above representations and warranties in the absence of an appraisal, the Correspondent
Client must examine the descriptive information, floor plan and photo exhibits from the property data
collection to determine whether the property meets all of the Selling Guide requirements.
• The PDR contains a data set that must be reviewed to determine if the subject property meets Freddie
Mac’s eligibility requirements. The property data collector must also specify when the subject property
has any required “repairs or alterations” or will require an “inspection” by a trained professional
when the property data collector cannot make the determination if repairs are needed.
• For PDRs completed with required repairs or alterations, a Completion Report performed by a property
data collector must be obtained, that verifies the repairs or alterations have been completed. The
Completion Report must contain all the data points and certifications in the Completion Report data set
(Addendum C) and the Completion Report certifications (Addendum D). The Completion Report must also
include photos of the completed repairs or alterations.
• For PDRs completed with an inspection required to identify if repairs are needed, a licensed professional
trained in the particular field of concern (for example but not limited to, a structural engineer, plumber,
pest inspector) must perform the inspection of the property. The inspector must provide either:
o A signed report that includes their license number stating the repair(s) is not required or
A signed report or invoice that includes their licensing number stating the repair(s) has been
completed and the issue corrected

 

[chad hampton]

So many rules, bullet points, and bull**** to avoid having a qualified appraiser to do the appraisal field work. Really the most important part of the appraisal analysis.

 

[Tom D]

It's fun talking about those who will replace us. The zombies pointing their fingers at the living. Although, i wouldn't call data collecting making a living in the long run.

I'm still confused about how 2 separate appraisal doings is faster than 1 doing by 1 appraiser, or more accurate. Don't look behind that curtain, bye bye appraisers.