While regulators have made it clear that compliance is ultimately the lender’s responsibility, a strong technology partner should always have the lender’s back. At Mortgage Cadence, we take that responsibility seriously.
Our compliance team continuously monitors the industry for emerging risks and regulatory shifts. Recently, our attention has turned to the real estate appraisal process, an area undergoing one of its most significant transformations in decades.
The goal of these changes: to reduce bias and promote equity in property valuations.
A Long-Overdue Update
The modern shift began when reports of whitewashing and appraisal bias prompted the creation of the federal Property Appraisal and Valuation Equity (PAVE) task force. Although PAVE disbanded earlier this year, one of its key initiatives lives on; the long-awaited modernization of the Uniform Residential Appraisal Report (URAR).
If you’re thinking the last meaningful update happened in the 1980s, you’re right. The FHFA’s new appraisal form represents more than a routine compliance tweak; it’s a reimagining of how appraisers document and communicate property values. Both Fannie Mae and Freddie Mac have prepared for this transition, and the form entered limited production this fall.
The Technology Bottleneck
Here’s where things get complicated. The appraisal industry runs on a different technology cadence than the LOS space. A small handful of vendors power most appraisal software, and innovation there has been relatively static for years.
That creates a bottleneck. While the GSEs were ready to accept the new forms, early reports suggest most appraisal technology vendors weren’t fully prepared for limited production. It’s understandable. Implementing major changes in legacy systems takes time when they’ve gone untouched for decades.
The Ripple Effect on Lenders
For lenders, this creates a dependency chain that’s hard to control: lenders rely on appraisers, who rely on their vendors. When one link experiences delays, everyone downstream feels the impact.
Training materials from Fannie Mae and Freddie Mac are excellent tools, but they don’t close the technology readiness gap. As one appraiser recently put it:
“I’m worried my vendor isn’t ready. When this becomes mandatory, I might get behind on my turnaround times even by a few days.”
In today’s rate-sensitive market, even a few days can affect borrower satisfaction and closing timelines.
What Lenders Can Do Now
While much of this transition is out of lenders’ hands, preparation and communication are key.
- Talk with your appraisal partners. Ask about their vendors’ readiness and transition plans.
- Prepare your internal teams. Ensure underwriters and processors have access to the GSEs’ training materials.
- Plan for delays. Build buffer time into your processes and set realistic borrower expectations.
This modernization effort is a positive step toward greater equity and transparency, but like any large-scale change, it will take time to stabilize. The lenders who anticipate disruption and plan ahead will be best positioned to succeed.
At Mortgage Cadence, we’re watching this transition closely and ensuring our platform continues to support lenders through every stage. Because in an industry built on dependencies, technology providers who anticipate challenges before they arise are the ones truly looking out for their lenders.
If you have questions about these changes or any compliance issue impacting your business, reach out to Mortgage Cadence today.
By Melissa Kozicki, CMB, CMCP, CAMS, Director of Compliance at Mortgage Cadence
Want more?
Follow us on LinkedIn to be notified when our next article is released.
Media Contacts
Mortgage Cadence:
Alison Flaig
Head of Marketing
(919) 906-9738
