What’s Changing with Fees?
Historically, vendor fees were calculated using multiple data points, with the appraisal form number serving as the primary factor. With the transition to UAD 3.6, the industry is moving away from using individual appraisal form numbers to define the scope of work for fee calculations. Instead, the scope of work will be defined by the property and loan characteristics supplied at order creation. The data describing the subject property now drives the appraisal report rather than a specific form. Consequently, vendor fees must be reconfigured and calculated within fulfillment platforms to reflect this data-centric approach. These new data fields have been integrated into the manual order forms and the order creation API.
Transitioning from Form-Centric to Data-Centric Fulfillment
Several new data points collectively describe the scope of work, replacing an appraisal form number. The following matrix demonstrates how to categorize the scope of work to align with previous legacy standards. These new fields have been integrated into both the order creation API and manual order forms.
Replacing Form Numbers as a Component of Fee Plans
To support UAD 3.6 orders, CMS and Collateral Management System® have designed a set of "Products" to provide clients with a baseline to start from, like the list of form types/services you use today for legacy forms.
Two of the primary UAD 3.6 data points, Property Valuation Method and Property Type, provide the basis for our UAD 3.6 product list.
Fees Management Within the CMS Platform
Fee & Price Plans serve as default fee schedules that the system uses to automatically calculate the correct fee for an order. Collateral Management System® breaks fees into two main types:
Vendor Fee: The amount paid to a service provider, such as an appraiser or Appraisal Management Company (AMC), for their work.
Customer Prices: The fee that is charged to the broker or loan officer, or the interdepartmental charge for the appraisal department's services
When the system calculates the fee for an order, it looks up the plan that applies to that product, geographic area, and client/client group, and then calculates the fee. You will enter the specific criteria and associated fees into your fee plan, so the system can calculate the fee for any given order. The total vendor fee or client price for an order is calculated by adding the base fee + any applicable add-on fees.
For Example:
Product: Traditional Appraisal - Single Family in Dayton, OH
Base Fees*:
*These fees are for illustrative purposes only.
Tier 1 ($0-$XXX.XXX) | Tier 2 ($XXX,XXX-XXX,XXX) | Tier 3 ($XXX,XXX-Infinity) |
$100 | $150 | $200 |
Additional Fees*:
*These fees are for illustrative purposes only
Miscellaneous | Rush Baseline + $50 |
ADU Baseline + $25 | |
Construction Method | Container Baseline + $25 |
Modular Baseline + $35 | |
Loan Purpose | Construction Baseline + $30 |
REO Baseline + $40 |
Using these fee configurations as an example, the vendor fee for a Traditional Appraisal - Single Family in Dayton, OH, with an estimated value in the Tier 2 range, that is marked as a rush and has a Construction Method of “Modular,” would be calculated at $225.
Customers who currently differentiate certain order characteristics by product will need to use additional data points for UAD 3.6 orders. For example:
Today, you order a 1004 with 1007 product for a legacy 1004 appraisal with a rent schedule.
For UAD 3.6, you place an order with a Valuation Method of Traditional Appraisal, Property Type of - Single Family, and Rent Schedule Indicator field set to on/yes. The fee will be calculated as the base fee for a Traditional Appraisal - Single Family product plus the add-on fee for the rent schedule.
Customers may use the Order Attributes and Loan Classifications fields to create custom characteristics that differentiate fees and are not accounted for in any of the standard order fields.