The Federal Housing Finance Agency has announced that Freddie Mac and Fannie Mae will launch a standardized method for lenders to submit information on mortgages as well as appraisals, according to today’s Reuters article. The protocol is expected to go into effect by 2011.

Known as the Uniform Mortgage Data Program, it is geared to reduce variations in lending standards that contributed to the housing bubble burst and the ensuing crash. Fannie Mae and Freddie Mac work together with industry participants and the FHFA to develop new standards for appraisals and other loan characteristics, even though they collect different types of information from lenders.

The FHFA said that lenders will be required to submit more complete and consistent data to Fannie Mae and Freddie Mac on properties, loan characteristics, borrower information and all parties involved in the transaction. Fannie Mae and Freddie Mac will still conduct their own proprietary reviews of the common appraisal data and apply their own business models and policies, according to the FHFA.

A joint electronic delivery system for the new data is expected to be available by October and the new data standards for single-family home appraisal forms will be required on all loan applications by January 1, 2011. While the switch to a uniform paperless system highlights the efficiency of the program, the question remains whether it will be effective.