Underwriting Guidelines Freddie Mac Unacceptable Appraisal Practices - Reminder

Bulletin 2024-004 Underwriting Guidelines Freddie Mac Unacceptable Appraisal Practices - Reminder

Newrez LLC "Newrez" Approved Correspondent Clients:  Reminder of agency updates regarding Freddie Mac unacceptable appraisal practices and UCDP fatal error messages.

 

Updates

 

Freddie Mac Bulletin 2023-22 released on November 1, 2023 announced the following unacceptable appraisal practices are effective with applications dated on or after January 30, 2024.

 

Newrez Announcement 2023-81 posted this information as of November 30, 2023 and are in effect. Unacceptable Appraisal Practices list include the following:

 

  • Provide “working class” and “inner city” as examples of terminology that could indicate underlying bias
  • Inclusion of statements, references or comparisons to crime rates or statistics, in the analysis or appraisal report
  • Confirm the scope of work for some appraisals do not require a personal inspection of comparable properties
  • Development of opinion of value based on factors from local, state, or federal law designates as discriminatory is unacceptable.

 

To support these unacceptable appraisal practices, UCDP has been updated with subjective and/or substantially biased words or phrases to identify this language in appraisal reports.  If these are triggered, new feedback messages have been implemented.  As of January 26, 2024 if the appraisal contains any of these words or phrases, the appraisal report will receive a Fatal message and cannot be successfully submitted to UCDP.

 

All clients are reminded that appraisals must be submitted to UCDP and receive a successful status from both Freddie Mac and Fannie Mae to be eligible for purchase.