1004MC & Neighborhood Section page 1

[George Ellerman]

Isn't it ridiculous that so many "qualified" and "certified" appraisers are not definitively certain on how to fill out a form which is supposedly crucial to an appraisal and has been required for some time now It's no wonder that the appraiser is eventually going the way of the dinosaur. I certainly hope that the general public doesn't visit the AF too often. It doesn't paint a pretty picture for competence does it ?

 

[residentialguy]

Isn't it ridiculous that so many "qualified" and "certified" appraisers are not definitively certain on how to fill out a form which is supposedly crucial to an appraisal and has been required for some time now It's no wonder that the appraiser is eventually going the way of the dinosaur. I certainly hope that the general public doesn't visit the AF too often. It doesn't paint a pretty picture for competence does it ?

get a clue George. It's not the appraiser...it's the form.

Since you're not "Certified", I'll cut you some slack for not understanding that.

 

[CANative]

Ditto residentialguy.

Forget rural areas. The form is hopless.

But even in urban/suburban areas there are problems. Many subdivisions have various model plans which can range from small 2 bedroom homes to eleborate and large 4 bedroom homes. And many models in between. In older subdivisions houses have been reconfigured over the years or even torn down and replaced with customs which are very different than the original models. etc, etc.

In breaking down "comparable properties" where does one draw the lines when the data is from the same location? 1,000 sf, 1,200 sf, 1,600 sf.; number of bedrooms; age, REO versus non-REO?

If you fine-tune too much you're left with too little data and too many properties excluded which some genius underwriter or distant reviewer will pick up on.

This thing is a freaking mess.

 

[JSmith43]

They way it was put to me was basically - "The lender isn't lending on all homes in the neighbrohood. They are lending on a specific property, and the one-unit housing trends should address the subject property and the properties is most directly competes with."

Does that Fannie official statement and a FAQ really have the power to turn the English Language on its head? Maybe, but it's not right

The form should be revised immediately and the Neighborhood section re-labeled The Part of the Neighborhood Fannie wants to talk about Section. Something like that.

I'm sure quite a few of the officials know what a sub beta effort the 1004MC integration to the 1004 has turned out to be. The 1004 needed a work over for a better fit.

The neighborhood section has traditionally been used to summarize land uses in the neighborhood, and illustrate the range of value of all properties withinin the neighborhood so that the reader can draw conclusions or at least come up with a theory as to how the subject relates to the neighborhood (possible examples:cheap home among $$ homes good for the cheap home, expensive home surrounded by cheap homes bad for the $$ home).

Say a report written to that particular FAQ specification and/or statement quoted at the top of the page, lands in court. Is waving a Fannie/Freddie FAQ going to prevali? I bet the Fannie/Freddie legacy communications on use of the neighborhood sections contain statements that are not in sync with that FAQ or the quote above.

Is a Q & A like an AO? Or, is it a Statement? Where's my GSE speak rule book? Is the answer, Turn in a narrative report with the form stapled to it?
Or, is it the E & O attorneys that the appraiser should seek out for guidance?

 

[CANative]

The neighborhood section has traditionally been used to summarize land uses in the neighborhood, and illustrate the range of value of all properties withinin the neighborhood so that the reader can draw conclusions or at least come up with a theory as to how the subject relates to the neighborhood (possible examples:cheap home among $$ homes good for the cheap home, expensive home surrounded by cheap homes bad for the $$ home).

That's always been the way I've seen the issue. "How does the subject property "fit" among all properties within the neibhborhood as described and depicted on the map?"

This is the MOST appropriate way of looking at things if you're trying to make a lending decision.

 

[JSmith43]

ResGuy, I think you should consider rolling with the punch and use manually selected comparables from the one year period to generate the 1004MC data on NorthstarMLS & use that output to fill in the top of page 2, URAR.

Just one problem: I'm sure you have noticed that a manual search of active listings rarely matches the NorthstarMLS active listings shown on the current 3 mo part of the 1004MC report data it generates. So, there is still some 'splaining to do on that part. Entering the manually discovered active competing listings with explanations makes sense to me.

Your thoughts?

 

[NC Appraising]

Greg,

I try to place myself in the buyers shoes. Since values are tied to financing, interest rates, etc., buyers can only afford a what they can afford. So if I know what the price range is for a given subject property, I use that along with the other features such as square feet, lot size, location, bedroom count (two vs. three). etc. I don't take it to the extreme that narrows my search so much as only a few sales show up or the other way around. I try for a good medium.

IMSHO, comparable does not mean "model match" or "mirror" property, or the opposite, a 1,200 sqft home to a 2,000 sqft home.


May be I appraise in a easier market, but I think your making things harder than need be.

If you have a home that is located in a project with many different price points (1,200 sqft to 3,000sqft) or one that is located in a water front community where as some are water front and some are not, I would search by a price range along with my other important features. Many appraisers are taking it to the extreme in both ways. Some are including too many sales that are not comparable and the others are making the search way to narrow.




Fannie wants to know the market trends specifically for the subject property and comparable sales like the subject property, not for every property type that is located in the neighborhood. Which I agree with. A 1,200 sqft home with a price point 0F 120K may have a differant market trends/conditions as compared to the 2,000 sqft home with a price point of 180k that is located in the same subdivision/neighborhood.



For rural properties, even Fannie says in their guidelines that in some situations that an appraiser may use "sales" that are not really "comparable" because that may be all that is available. So just because you use "sales" in the grid that are not really "substitute" properties, it does not mean that you have to include it in the data for the 1004MC.

 

[CANative]

I don't take it to the extreme that narrows my search so much as only a few sales show up or the other way around. I try for a good medium.

The 1004MC implies an almost scientific degree of accurancy and reliance. The best we can do to populate the form is trying for a good medium.

Just one problem: I'm sure you have noticed that a manual search of active listings rarely matches the NorthstarMLS active listings shown on the current 3 mo part of the 1004MC report data it generates.

The three month listings include current AND expired listings. A manual search will only include current listings.

 

[residentialguy]

That's always been the way I've seen the issue. "How does the subject property "fit" among all properties within the neibhborhood as described and depicted on the map?"

This is the MOST appropriate way of looking at things if you're trying to make a lending decision.

Agreed! It's bad enough that forms put appraisers in a box, but to have the form give conflicting informantion is nutz.

Next thing you know, FNMA will come up with a form appraisal form asking if a property has less value as a previous time period and reduce it to a yes or no check box.

.....oh wait

 

[JSmith43]

The three month listings include current AND expired listings. A manual search will only include current listings

The MLS report comes up with an undercount compared to manual count, even before being refined by searching expired, canceled and withdrawn listings.