8/20/12: “Data. It’s good stuff.”
What are some of the issues around not having enough data on an appraisal?
Why would lenders want GSEs to submit both data on the loan file and data on the appraisal?
In today’s Morning View, Bill Rayburn and Bob Dorsey discuss the importance of data amid “rumors from deep sources” (Dorsey’s words) that the GSEs are unhappy with data extraction from appraisals.
Bob Dorsey: For a long time, the GSEs had essentially no data about the appraisal. The appraised value was the limit of it. The servicer got the whole file…
Bill Rayburn: And the GSEs got a limited data set, maybe 30 fields, on the appraisal.
Dorsey: They (the GSEs) tried to get more data on the appraisal so they could do better due diligence on the loan file.
Paper files are still submitted, but the GSEs now mandate that all appraisals are delivered as data, whether in XML format; as a .pdf from a appraisal forms software provider; or as paper/fax.
Dorsey: Eleven years ago, we developed a way to use technology and manual verification together through a optical character recognition process. The software identifies the field, tries to convert the images into actual data, and then it’s presented to an actual person who verifies if it’s correct. If it’s incorrect, the person fixes it. But it’s a big challenge. Recently, we’ve been hearing that GSEs are tired of errors and are going to hold the lender responsible for data extraction errors. It’s going to be very important to the lender to make sure the data, if extracted, is extracted correctly.
Rayburn: We have to caution our listeners — as of today, this is only rumor. There has been no official pronouncement. You know how rumors are — it might be true, and it might not be true.
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