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Anyone get this stip?

Discussion in 'General Appraisal Discussion' started by jmarch305, Nov 8, 2009.

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  1. jmarch305

    jmarch305 Sophomore Member

    0
    Mar 28, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Arizona
    "Explain why market conditions shows "stable" while, www.fhfa.gov, shows declining trend."

    I am just explaining to the UW that the appraiser researched closed sales within the described neighborhood boundaries within the prior 12 months and the general trend is stable as of the effective date. Also, this method is more accurate in determining the trend than a zip code, city or state analysis.

    Any thoughts.
     
  2. Randolph Kinney

    Randolph Kinney Elite Member
    Gold Supporting Member

    225
    Apr 7, 2005
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    UWs don't know your market and the specific neighborhoods. They rely to some degree on the FHFA or Case-Shiller indexes for trends.

    I put in the chart that my local MLS generates for the zip code the subject is in and I contrast that with the neighborhood chart that I make.

    The explanation between the two? The zip code chart shows all sales, all listings, all GLA, all ages, etc., with no filtering to make it a reasonable comparison to the subject as what comparables are doing.
     
  3. Happy Val

    Happy Val Sophomore Member

    0
    Oct 30, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    Oregon
    I just note that it was taken from a smaller sampling of properties and therefore may not match the information on page 1 of the URAR.
     
  4. Mike Kennedy

    Mike Kennedy Elite Member

    341
    Sep 28, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    New York
    ......because the Generic Basis FHFA's Index is NON-SPECIFIC containing reams of NON-RELEVANT data which has absolutely no bearing on the subject's immediate neighborhood nor LOCALIZED market value trends for the most similar, proximate, and recent properties which would directly compete with the subject property.

    "Background
    FHFA’s purchase-only and all-transactions HPI track average house price changes in repeat sales or refinancings of the same single-family properties. The purchase-only index is based on more than five million repeat sales transactions, while the all-transactions index includes more than 36 million repeat transactions. Both indexes are based on data obtained from Fannie Mae and Freddie Mac for mortgages originated over the past 34 years.

    FHFA analyzes the combined mortgage records of Fannie Mae and Freddie Mac, which form the nation’s largest database of conventional, conforming mortgage transactions. The conforming loan limit for mortgages purchased since the beginning of 2006 has been $417,000. Loan limits for mortgages originated in the latter half of 2007 through Dec. 31, 2008 were raised to as much as $729,750 in high-cost areas in the continental United States.


    The American Recovery and Reinvestment Act, enacted in February 2009, extended those limits for 2009 originations in places where those limits were higher than those originally calculated for 2009.

    This HPI report contains tables showing: 1) House price appreciation for the 50 states and Washington, D.C.; 2) House price appreciation by Census Division and for the U.S. as a whole; 3) A ranking of 296 MSAs and Metropolitan Divisions by house price appreciation; and 4) A list of one-year and five-year house price appreciation rates for MSAs not ranked.


    http://www.fhfa.gov/webfiles/1154/hpimonthly122308.pdf


    12. How does the House Price Index differ from the Census Bureau’s Constant Quality House Price Index (CQHPI)?
    The HPI published by FHFA covers far more transactions than the Commerce Department survey. The CQHPI covers sales of new homes and homes for sale, based on a sample of about 14,000 transactions annually, gathered through monthly surveys. The quarterly HPI is based on more than 36 million repeat transaction pairs over 34 years. This gives a more accurate reflection of current property values than the Commerce index. The HPI also can be updated efficiently using data collected by Fannie Mae and Freddie Mac in the normal course of their business activity.


    13. How does the HPI differ from the S&P/Case-Shiller® Home Price indexes?
    Although both indexes employ the same fundamental repeat-valuations approach, there are a number of data and methodology differences. Among the dissimilarities:

    a. The S&P/Case-Shiller indexes only use purchase prices in index calibration, while the all-transactions HPI also includes refinance appraisals. FHFA’s purchase only series is restricted to purchase prices, as are the S&P/Case-Shiller indexes.

    b. FHFA’s valuation data are derived from conforming, conventional mortgages provided by Fannie Mae and Freddie Mac. The S&P/Case-Shiller indexes use information obtained from county assessor and recorder offices.

    c. The S&P/Case-Shiller indexes are value-weighted, meaning that price trends for more expensive homes have greater influence on estimated price changes than other homes. FHFA’s index weights price trends equally for all properties.

    d. The geographic coverage of the indexes differs. The S&P/Case-Shiller National Home Price Index, for example, does not have valuation data from 13 states. FHFA’s U.S. index is calculated using data from all states.

    POSTER OPINION
    aka "our spaghetti on the wall is better than Case/Shiller's noodles and depending on how you wish to manipulate the data - you can pretty much get it to say anything you wish".
     
  5. Metamorphic

    Metamorphic Senior Member
    Gold Supporting Member

    65
    Mar 15, 2008
    Professional Status:
    Certified Residential Appraiser
    State:
    California
    "FHA statistics consider the entire market. The characterization of the market provided in my appraisal report is neighborhood specific, and focused on the subject's specific sub-market. In this case while the market as a whole is declining, the subject's sub-market has stable pricing.
     
  6. VolcanoLvr

    VolcanoLvr Senior Member

    32
    Oct 30, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    Washington
    I have this info in my Addendum (but it does not guarantee it's read!):

    "Regarding Property Value trends, it is important for underwriters to understand that national statistics provided by NAR, OFHEO, and S&P/Case Shiller for Regional MSAs are very broad in nature, and include diverse properties that in many cases are unrelated to the subject's characteristics and/or specific location within the MSA. Use of these broad-based statistics may not be credible for the subject's specific valuation assignment. Major mortgage loan funders recognize that sub-markets exist within the broader MSA, and that an evaluation of the subject's specific features may reveal a trend contrary to, or similar as, the overall MSA information.

    The appraiser utilizes extended time research and analysis involving properties directly comparable to the subject to determine the Property Value trend noted on Page 1 of the 1004 Form.

    The current residential sales market for properties similar to the subject appears to be (add your own statement) with the current housing demands for the subject's market area."
     
  7. NC Old Guy

    NC Old Guy Junior Member

    0
    Jan 16, 2002
    Professional Status:
    Certified General Appraiser
    State:
    North Carolina
    Sorry, I'm just glad to see a lender that actually has the ....s to ask. Too many appraisers just mark "stable" despite all evidence to the contrary because they don't want to create a problem for anyone. I get to mark "stable" about 10% of the time: the rest are decline. I never get a question since all of the data as to how I reached the conclusion are in the report. That doesn't stop us from getting "fired" because "no body else says it is a declining market & since you marked that, our borrower has to come up with an extrat 5%, you stupid @#$%.

    In my opinion, anyone marking stable should be forced to prove it.
     
  8. Terrel L. Shields

    Terrel L. Shields Elite Member
    Gold Supporting Member

    749
    May 2, 2002
    Professional Status:
    Certified General Appraiser
    State:
    Arkansas
    I believe the FHFA relies only on Fannie mae data. In my market, that is less than 20% of the market and is generally in a narrow range of values from $50K - $250K and does not capture the huge distressed prices in the very lowest and highest of our market, nor does it capture the stablest parts of our market, generally in the $75-150K range. Fannie/freddy loaned a lot of crap, but most local lenders refused to write "loc doc, no doc" loans. Only CW and some of the other Bit players of similar ilk were doing those here.
     
  9. Mike Garrett RAA

    Mike Garrett RAA Elite Member

    48
    Jan 14, 2002
    Professional Status:
    Certified Residential Appraiser
    State:
    Colorado
    If an appraiser marks declining on a VA appraisal they must support that by gridding at least two listings. What is wrong with that logic?

    Some very good stuff in this thread...think I will cut and paste into all my reports.
     
  10. Mike Boyd

    Mike Boyd Elite Member

    0
    Jan 18, 2002
    Professional Status:
    Retired Appraiser
    State:
    California
    It probably takes FHA a year or more before publishing any market research. So, it is stale at the time it becomes available.
     
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