HUD has refined its process with the release of its new Electronic Appraisal Delivery (EAD) Portal. The EAD is now live and some mortgagees and AMCs have been testing it for the last several months. With this new system in place, all appraisals for new originations must be submitted to FHA through the EAD portal for all FHA case numbers assigned on or after June 27, 2016.
For those mortgagees that also work in the forward space and submit to the FNMA/FHLM Uniform Collateral Data Port (UCDP), the process will be familiar, as the portals are nearly identical and are hosted by the same vendor.
HUD recommends that mortgagees and appraisers familiarize themselves with the EAD by visiting its website for details. There you will find a host of information on data formats and forms, hard stop checks and warning messages, and common appraisal data errors.
While HUD has done its best to provide clear guidelines to help users navigate the EAD, there will likely be some challenges for submitting entities (lenders or the lender agents if the AMC is submitting on your behalf), especially when it comes to solving an issue with a transmission deemed unsuccessful.
Here are some things to look out for:
- The appraisal report must be in the proper MISMO XML format, and this includes the 1004D Appraisal Update and Completion Report.
- The FHA case number must be at the upper right corner and must correspond with the respective XML label for that field. Appraisers should confirm with their software provider where that is.-The FHA case number may appear in a similar place on other pages, but its inclusion and placement is not a strict requirement.
-Case numbers must be formatted as ###-#######. No missing or additional hyphens or spaces and no Automated Data Processing (ADP) codes.
- The property address, city, state and ZIP code must conform to USPS postal addressing standards. This is a UAD requirement and it is important to note that this does not mean the address matches the address found in USPS.
- The site size (even for manufactured homes) must meet UAD requirements.
- Monetary data fields should not include a dollar sign.
- File sizes of the reports should be less than 4MB.
-For those of you who expect crystal-clear photos, or tons of them, be aware that this may present some problems. HUD says these images “need to be legible, but not at the highest resolution.” So find ways to lower the resolution settings on your camera or scanner.
If the retrieved SSR denotes that the transmission of the report is not successful, the appraisal will not be logged into FHA Connection. The issue will have to be solved and doing so can be a challenge. Consider Hard Stop FHA500, for example: “FHA Case Number is missing or provided in an invalid format.” You open the appraisal report and see the FHA case number, so it is not missing. It is 123-4567890; so it is formatted correctly and is the correct number. Well, the system may think it is missing because it is not in the appropriate XML location for that data field. You have no way to identify where that is and no idea where to instruct an appraiser to place it.
My recommendation is to become familiar with the EAD as much as you can and to work with your AMC and the appraiser in solving these hard stops and messages. Be aware that appraisers do not have access to the EAD or the SSRs and the changes in data formatting requirements may be equally frustrating for them.
The EAD portal, FHA’s new Handbook 4000.1, are intended to streamline the FHA appraisal and origination process. Both mortgagees and appraisers must let go of old and outdated requirements and comply with the new ones. Through a collaborative and unified effort, we can overcome this change and prepare for the next.