The regulator for Fannie Mae and Freddie Mac said on Monday the U.S. government-controlled mortgage finance giants will launch a standardized method for lenders to submit information on mortgages, including appraisals, by next year.
The Federal Housing Finance Agency's new uniform data protocol for Fannie Mae and Freddie Mac is aimed at reducing variations in lending standards that helped fuel the recent housing bubble and crash.
Fannie Mae and Freddie Mac have traditionally required different information from lenders for the loans they purchase and securitize. The two government-sponsored enterprises worked together with industry participants and FHFA to develop the new standards for appraisals and other loan characteristics.
The Uniform Mortgage Data Program will help strengthen efforts throughout the industry to support sustainable home ownership and prudent risk management practices, Fannie Mae Chief Executive Michael Williams said in a separate statement.
FHFA said the new common protocol will require lenders to submit to Fannie Mae and Freddie Mac more complete and consistent data on properties, loan characteristics, borrower information and the parties to the transaction.
Fannie Mae and Freddie Mac will still conduct their own proprietary reviews of the common appraisal data and apply their own unique business models and policies, FHFA acting director Edward DeMarco said in a statement.
A joint electronic delivery system for the new data is expected to be available by October, FHFA said, while the new data standards for single-family home appraisal forms will be required on all loan applications by January 1, 2011.
The U.S. Treasury Department, which seized control of the two companies in September 2008 to keep them from collapsing under the weight of the housing crisis, has decided to largely delay until next year its effort to reform the two entities and the U.S. housing finance system in general.
The reforms, which could see the two GSEs broken up into smaller firms, turned into public utilities or restructured in other ways, are ultimately up to Congress to decide.
(Reporting by David Lawder; Editing by Neil Stempleman)