As UAD 3.6 nears, Class Valuation's Tanya Wright on technology and the thinning appraiser pool
Fannie Mae and Freddie Mac gave lenders that aren't ready a one-time exception to the new Uniform Appraisal Dataset (UAD) 3.6 mandate, but the change is coming for everyone next spring.
That deadline is landing on a profession already short of people, with growing concerns that more appraisers could opt out of the industry rather than adopt the new changes.
Some appraisers are telling their management companies they would rather retire than learn the new data requirements, and a further contraction of the industry could have direct impacts for brokers and homebuyers.
Tanya Wright (pictured top), executive vice president of third-party origination and distributed retail at Class Valuation, said the mandate adds pressure to a profession that is already thinning.
"There is this underlying question of how many appraisers are going to retire based on not wanting to learn something new," Wright told Mortgage Professional America. "Anecdotally, as we talk to appraisers, they say that, right? Like, 'I'm not learning the new way, I'm out.'"
A shrinking pool of appraisers
UAD 3.6 becomes mandatory for every lender on May 20, 2027. Wright said even before the UAD changes, the industry was concerned about more people leaving than entering.
"Appraisers in general are an aging industry, an aging profession with not as many entering the profession as exiting the profession," she said.
Michael Farrell, president of the National Association of Mortgage Brokers (NAMB), cited numbers that showed the potential problem. He said the Appraisal Foundation and the Appraisal Institute expect 23% to 25% of field appraisers to age out of the field instead of adopting the new format, and that the average field appraiser is over 62.
While many in the industry are used to the old way of doing appraisals, Wright said it limits how much an appraiser can earn, and the hybrid and digital approaches covered below are meant to ease that.
The traditional appraisal puts the appraiser in the car and behind the camera before any analysis begins. Wright said that model caps what one appraiser can take on.
"You think of the old school appraisal model of, I'm an appraiser, I'm going to this house, I'm going to the next house that's across town, spending an hour driving," she said. "Then spending an hour taking pictures and measuring and doing all of the things. And then by the time I do all of that, I have to go home and then write the reports, right? And probably 10 years ago it was type the report by hand."
Wright said the standard appraisal, where one appraiser handles the drive, the photos, and the report, also limits what an appraiser can earn. She tied that to the struggle to attract newcomers.
"If you take an average appraiser fee, multiply it by, they can only do 4 or 5 in a day, there's no way to make more money, right?" Wright said. "You can't scale it up. You can't do more. There's no more efficiency that an appraiser can get in that model."
Where technology steps in
The first layer is to split the job in two. In one model, someone other than the appraiser handles the site visit, and the lender has to approve the product.
"We have hybrid and digital appraisals where it might not be the appraiser itself going to the property," Wright said. "We have property data collectors that will go and will do scans of the house and collect all the data. Leveraging AI for a lot of that, making sure we get every single space captured in videos and photo walkthroughs."
Quality checks are the second layer. Class Valuation's Class INtelligence tools screen reports ahead of a human reviewer.
"Even before it gets to our QA or QC department, there is oversight happening, a data check to check the lender's requirements, Fannie's requirements, regulatory expectations," Wright said. "The appraiser's getting real-time feedback. They can fix any data issues right there. A byproduct of that is you have fewer revisions and faster turn times in general."
Revisions cost everyone in the chain time, Wright said. That includes brokers, who wait longer to get to clear to close.
"If we can front load as many of those checks as possible, then scalability goes up, turn time goes down, and manual touches for everybody go down," she said.
The third layer goes further. CVUE, a platform for loans headed to Fannie Mae and Freddie Mac, stands behind the value on covered loans.
"We are so committed to the quality that we are actually insuring our appraisals," Wright said. "We're underwriting to Fannie and Freddie, providing revisions and then providing monetary assurances if there's a buyback from Fannie and Freddie."
It covers a defined set of loans, with limits on loan amount and CU score, Wright said. Where it applies, a lender's underwriters can skip much of the appraisal review.
"Brokers should know which of their lenders are leveraging that platform or not because it does shave turn time down for sure," she said. "And we know brokers are very, very reliant on that turn time, and anything that can shave away is huge."
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