Addressing Concerns in Response to Implementation of the New CFPB Property Valuation Requirements
November 26, 2013
We heard your feedback on how our property valuation messaging is impacting your implementation of the new disclosure requirements for property valuation information announced in the Consumer Financial Protection Bureau (CFPB) final rule on the Equal Credit Opportunity Act (ECOA) amendment under Regulation B.
The final rule, effective on January 18, 2014, requires creditors to provide loan applicants with free copies of all appraisals and other written property valuations developed in connection with an application for credit.
We understand that because of the number of valuations you may receive from Freddie Mac during the application process, there is concern about possible increased risk of not being in full compliance with the requirement. To help address your concerns, Loan Prospector® and Uniform Collateral Data Portal® (UCDP®), which return Home Value Explorer® (HVE®) valuations, will be updated to reduce the frequency of receiving valuation information from Freddie Mac. These updates also may help minimize possible loan applicant confusion from receiving and interpreting multiple valuations.
Our upcoming updates will not affect the requirements and guidance announced in Single-Family Seller/Servicer Guide (Guide) Bulletin 2013-20 related to what is recommended to be disclosed when you are required to disclose valuation information.
Today, HVE point value estimates can be accessed through Loan Prospector and are provided on the Loan Prospector Feedback Certificate. Prior to the January 18, 2014, effective date, Loan Prospector will be updated to provide you with options on receiving or not receiving HVE point value estimates and related valuation information.
We will be contacting Freddie Mac Seller/Servicers soon with more details on these options.
- Third-Party Originators (TPOs)
- Sponsored TPOs (affiliated with an approved Freddie Mac Seller) – If you are sponsored by an approved Freddie Mac Seller and submit loans using a Seller number, you will not have the option to select whether you will or will not receive HVE point values estimates and messages in Loan Prospector, the option will be selected by the lender sponsoring you.
- Unsponsored TPOs (not affiliated with an approved Freddie Mac Seller) – If you submit loans to Freddie Mac using a TPO number, you will not have the option to choose whether HVE point value estimates and messages will be returned in Loan Prospector. The HVE point value estimate and related messages in Loan Prospector will only be returned in Loan Prospector Feedback on Relief Refinance MortgageSM - Open Access transactions.
Uniform Collateral Data Portal
The UCDP currently provides valuation information generated by HVE, including the HVE point value estimate. Prior to the January 18, 2014, effective date, HVE valuation messages will be temporarily suspended and access to HVE point value estimates through UCDP will not be available. We plan to revise our HVE messaging when we implement the second phase of our proprietary messages in the UCDP in the summer of 2014 and remove the temporary suspension
System-to-System Users Using Freddie Mac Loan Prospector Style Sheet Instructions
If you are required to provide valuation data to your loan applicants, as announced in Guide Bulletin 2013-20 in October 2013, technical instructions are now available for loan origination vendors and custom lenders, which will allow you to update your systems and manage the HVE data when sharing this information with loan applicants.
For these technical instructions and language to use when sharing Freddie Mac’s proprietary property valuation information with loan applicants and borrowers, visit our Using Freddie Mac Property Valuation Data Web page.
These updates are part of our ongoing efforts to make it easier for you to do business with Freddie Mac in today’s housing market. We will provide Seller/Servicers with additional detail and guidance on the changes to these two systems in the near future.
If you have questions, please contact your Freddie Mac representative.