MLS Cyberattack: Temporary Solution to Limit Impact on Appraisals
The recent cyberattack has impacted many multiple listing service (MLS) systems across various regions of the country. This has real estate agents scrambling for ways to meet the needs of their clients and limit disruption to their business. It’s also impacting the appraisal process and is generating questions from both lenders and appraisers about what this means for appraisals on loans sold to Freddie Mac.
The National Association of REALTORS® has notified us that the Realtors Property Resource® (RPR®) dataset can be used by appraisers as an MLS alternative until MLS system access is restored. Non-REALTOR members, including appraisers, may request temporary access through their local MLS board. This temporary access to RPR will provide sales, listing data and photos currently available through the MLS, as well as public record data. Obtaining access to RPR is subject to local MLS boards providing credentials and is not mandatory.
NOTE: Appraisers must use all pertinent resources available and confirm sales data with multiple sources.
Why Does MLS Availability Affect Appraisals?
The Single-Family Seller/Servicer Guide (Guide) outlines the requirements for appraisals on loans sold to Freddie Mac. In particular, Standards Rule 1-4 of the Uniform Standards of Professional Appraisal Practice (USPAP) requires appraisers to, “...collect, verify and analyze all information necessary for credible assignment results” and the GSE appraisal forms require appraisers to certify that they have access to the necessary and appropriate data sources (such as MLS, tax assessment records, public land records, etc.) to develop and report appraisals.
An MLS is a valuable resource for appraisers in the development and reporting of appraisals. If an appraiser doesn’t have access to an MLS, it may be very difficult and/or take significantly more time to complete the assignment.
What Does This Mean for Appraisers?
Appraisers should only complete assignments when they’re confident the results are credible. If an appraiser doesn’t have sufficient data to develop a credible and adequately supported appraisal, or the appraiser believes the opinion of value may change when access to the MLS is available, the corresponding loan is not eligible for sale to Freddie Mac.
What Does This Mean for Lenders?
Appraisals could take longer. Some appraisals may not be completed until MLS access is restored. Lenders should keep this in mind and understand impacts to their process, including ensuring that appraisers are not pressured to complete an assignment. Again, remember that appraisals must meet Guide requirements, including, but not limited to, the Appraiser Independence Requirements and Unacceptable Appraisal Practices for the loan to be eligible for sale to Freddie Mac.
We know this is a fluid situation with many unknowns, which can be frustrating for all participants in the loan origination process. We’ll continue to monitor the situation and provide additional information where appropriate.