Fannie Mae, the government-sponsored enterprise (GSE), has approved six firms to participate in its new valuation initiative, which may represent the biggest change in the valuation industry in years. The program cuts traditional appraisers out of the process, offering new options for property valuations, such as “value acceptance” and “value acceptance plus property data and hybrid appraisals.” The participating firms will collect appraisal data and submit it through Fannie Mae’s API, and some of the biggest names in the mortgage tech space, including Solidifi, Class Valuation, Clear Capital, Mueller Services, Inc., Accurate Group, and Black Knight’s Collateral Analytics LLC, are among them.
Under the new value acceptance plus property data option, third-party firms are authorized to collect the data at the property site, as long as they have a background check and are “professionally trained” and competent to do so. This data can only be submitted through Fannie Mae’s “Property Data API.” In a statement, Accurate Group said it has completed over three million property data inspections and hybrid appraisals through its ValueNet suite of products.
According to Kenon Chen, executive vice president of strategy and growth at Clear Capital, the potential for modernization in the industry is enormous with Fannie’s announcement. “This is a standardized data collection done at the property, which brings objective, transparent data into the whole process,” he said. “I think that not only drives this program but paves the way for a better appraisal process when an appraisal is needed.”
However, appraisers are not pleased with Fannie Mae’s new initiative. One appraiser of 23 years told HousingWire that there are real questions about the reliability of people hired to collect the data on behalf of vendors, which could be real estate agents or others that Fannie Mae deems “professionally trained.” “I am not confident that many will want to take on that task as it could lead to bigger issues for them down the road. What if they miss-measured a property that now is their listing?” the appraiser said.
Fannie Mae’s new initiative provides an innovative approach to property valuations that may significantly impact the valuation space. However, it remains to be seen whether appraisers will be able to adapt to these changes and continue to participate in the valuation process.