The mortgage industry is taking steps to ensure accuracy and consistency through the Uniform Closing Dataset (UCD), a new protocol for maintaining electronic loan data. It has been referred to as a “data makeover,” which requires lenders to adopt new policies.1 And while the goal is to simplify processes and set standards for the industry, there is no doubt that the implementation of new procedures will require additional work and training to be implemented successfully. Refer to this checklist for some helpful tips to make this process smooth.
What is UCD?
The UCD is a dataset, or rather, a collection of related information, that allows information on the Consumer Financial Protection Bureau’s (CFPB) Closing Disclosure to be shared electronically. The UCD has been developed at the direction of the Federal Housing Finance Agency (FHFA) as part of the Uniform Mortgage Data Program, which is an ongoing initiative by government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac2 to enhance loan quality and consistency through uniform data standards for single family loans that the GSEs purchase.
In 2016, Fannie Mae and Freddie Mac announced that the UCD would be required for any loans delivered to them on or after September 25, 2017.3
What are the benefits?
UCD eases submissions of loan information, enabling greater consistency by promoting more efficient data integration and sharing between business partners.2 Overall, the standardization of data will lead to better accuracy, consistency and clarity surrounding loan transactions.
How does the process work?
Lenders have the option of submitting either a single file or batch file directly through the web-based interface or via a B2B direct integration platform.4 This method of improving data accuracy will eliminate the need for proprietary formats that not only can be costly to maintain, but also can lead to a misinterpretation of the data.2 Lenders will be able to receive data quality and eligibility feedback messages, which are designed to help ensure eligibility compliance. Additionally, Fannie and Freddie have both developed capabilities to aid in loan tracking.
Another important item to note is that each GSE has the same UCD delivery specification, which means there is no need for adjustment or modification required when submitting to Fannie Mae or Freddie Mac. The timelines are also identical.2
What is the collected data being used for?
Using more and better quality data can help enhance credit risk management. Having these measures in place will also help increase the ability to detect fraud and misrepresentation of a loan delivery. And ultimately, these protocols will provide additional transparency into mortgage loan transaction files and verify whether the loan meets the GSE’s eligibility requirements.2
What are the steps to implementation?
Fannie Mae and Freddie Mac lenders and technology solution providers should be actively involved in implementing UCD. If you have not started your implementation steps yet, use the resources on the UCD page to support your transition.
How can I get help with implementation?
There are various resources available, including live webinars (UCD Collection Solution User Training and Demo) and tools on the FannieMae.com UCD page, such as: a user guide, quick guides, a self-paced eLearning presentation, fact sheets and FAQs.
For more information, you may find resources available through the Fannie Mae UCD website.