One of the most significant data changes coming in 2017 will be the delivery of the Uniform Closing Dataset (UCD) to Fannie Mae and Freddie Mac, which becomes mandatory on September 25, 2017. The UCD is a component of the GSEs’ Uniform Mortgage Data Program® (UMDP®) which defines data initiatives for loan closing, collateral, appraisal and loan delivery, in order to enhance data quality and standardization for the industry. UCD defines common industry data around the Consumer Financial Protection Bureau’s (CFPB) integrated disclosure laws; lenders will now be able to transmit the CFPB Closing Disclosure documents and data electronically. This way, regulators and the GSEs see “what the borrower sees.” The files also create an accurate loan file that is consistent for all lenders who sell loans to the GSEs.
The interesting thing about the UCD mandate is that it could serve as a springboard to greater acceptance of eMortgage and eDocuments. By simply making the step of sharing disclosure and closing data electronically with the GSEs, the industry is taking out another speed bump to a completely paperless lending infrastructure. As more millennials begin buying their first homes, their demand for more electronic documents will coincide with the increased acceptance from GSEs and regulators of electronically signed forms.
Preparing for the UCD
Preparing for UCD will not be as complicated as the implementation for TRID, but there are still some key steps lenders need to take. One of the best things every lender should do is embrace the MISMO data standards. The UCD and other upcoming data reporting requirements like the new HMDA will all leverage the MISMO standards, making the collection and sharing of data fields a consistent experience.
From there, lenders will need to make sure they have the technological capabilities to embed the UCD file into their GSE loans. Naturally, some lenders will prefer to build a workflow and IT backbone in-house, but most lenders will want to work with their document and LOS providers to ensure they can meet the GSEs needs.
We’re helping our customers prepare for this update by providing a test environment more than nine months ahead of the deadline. Earlier this month, we updated ConformX to provide a test UCD file. Using this file, lenders can begin testing the workflow for accuracy and the most efficient approach to collecting and reporting the data.
Other partners, such as the LOS, may not be as far along in the process, but lenders should reach out to their vendors to inquire about timelines, capabilities and any possible training.
We’re already preparing our customers with tools to bridge any gaps in a lender’s tech environment. For example, ConformX has a test user interface that generates a UCD from our screens so lenders can see how it fits into the workflow. This way, lenders can have staff fully trained by summer, well in advance of the September deadline. We can also connect directly to the GSEs to transmit the UCD file in the event that a lender’s LOS cannot handle the changes by the implementation date. While ideally, the LOS and Document providers are both UCD-compatible, we know that sometimes there are delays, and we want to ensure that no lender is left behind.