Educate your clients on the new Fannie forms

As lenders start requiring the new Fannie Mae appraisal forms November 1, many of your customers, especially brokers not directly affiliated with a lender, are going to rely on you as their appraisal expert to tell them what they need to know about the new forms. Even if they don't look to you, you should take the opportunity to market yourself as their local subject matter expert. Beyond marketing value, taking this opportunity to tell the story of the new forms accomplishes some good substantive things, too.

You'll be able to tell your clients, correctly, that the new forms are (or can be) a lot more work. You can tell them you're more on the hook for certain representations – for example, the word "apparent," which used to be your friend on the old forms, is gone from a couple key sections now. Finally, you can let them know how seriously the new forms take the statement that you haven't been pushed to hit a number.

XSellerate, our automated marketing program, and a new content page we've created for your Appraisal XSite website can help. Soon you'll have three graphic, high quality e-mails ready to be sent to your clients about the new Fannie forms in XSellerate. For content you can choose an "executive summary" of the new forms and what it means to your clients, or the "top 12 things you need to know right now" about the forms. Look for them Friday in the XSellerate E-mail Library under the Lender filter.

A corresponding XSite content page is available now for you to direct clients wanting further information. See it here and to put it on your own XSite, you'll find it called "New FNMA Forms" under pre-written content.

Of course the most important thing to you is whether you can complete the forms yourself. WinTOTAL form filling software users have had the forms since shortly after they came out in their final form this spring. Many of our users have been getting their feet wet with them already – Fannie and many lenders have made the new forms optional until the final deadline for the permanent switch. Note: You don't need Aurora to use the forms! You've got them in Athena.

Take your clients to school

What are the most important things you and your clients need to be on the same page about in the new forms? The fact that there are 11 new ones is a good place to start. Many clients will notice new URARs and 2055s right away but should know there are many more redesigned, retired and brand new forms too.

With the redesigned 2055, there is no longer any such thing as a "2055 with interior." The new 2055 is Exterior Only. For interior inspections, pictures and sketches, you should encourage clients to order a URAR.

The cost and income approaches are optional on the new forms. Appraisers will only complete them where necessary.

Not that you ever did this before, but… you can't do an "appraisal update" to reflect a value increase on the new 1004D appraisal update/completion form. The form has two functions. It certifies that assumed improvements on a new construction appraisal have been completed. It also certifies that the value reflected in a previous report has not decreased. If the value has gone up and your client wants to reflect that, that's a new appraisal.

For purchase transactions, your clients will need to send you the sales contract. You need to analyze it as part of the reports.

Finally, there is new, stronger language in the form where the appraiser certifies that he or she was not subject to pressure to "hit a number," with the current assignment or any future work contingent on achieving a certain value. The language in the form says "written or otherwise," meaning the appraiser cannot complete the new form(s) if the client asks whether the appraiser can "come in" at a certain value before assigning the appraisal, or threatens not to pay for completed work if the value isn't at least $X.

Most changes are positive ones but there's a lot for you and your clients to get used to. Take advantage of this time to guide clients through the new forms, and you'll reap marketing rewards as well as some other benefits.