1004mc argument with reviewer

[Lee Lansford]

I didn't know that I had already replied to this post earlier.

Good thing I didn't contradict myself!

Howard: I agree that Fannie doesn't trump USPAP. But, I don't see any contradiction or a risk of misleading anyone if within the appraisal report one (a) gives Fannie what they want and (b) supplements the analysis as the appraiser feels is necessary (that's why I put the definitions of neighborhood and market in my reports).

In specific regard to the 1004MC, the biggest complaint I hear (and I make it myself) is that by simply following the instructions on how it should be completed, the results are meaningless and useless.... except that the instructions also state that if the appraiser believes it needs to be supplemented, then the appraiser should supplement it.

I've heard no one complain (or, if I have, I've missed it) that an analysis which includes the 1004MC with supplementation when needed is meaningless and useless.


So what we have in the 1004MC (IMNSHO) is a market analysis protocol that many times returns useless results for its intended use. Without supplementation, it is defective. With supplementation, it works. If we use it and supplement it when needed, then the results are credible and no one is mislead.

Amen.

At this this point--how many years now have we had the 1004MC?--I wonder how it is that some remain in rebellion.

 

[residentialguy]

Amen.

At this this point--how many years now have we had the 1004MC?--I wonder how it is that some remain in rebellion.

Even though the prisoners in concentration camps learn how to work the system, I'm sure they remain in rebellion and rightfully so. Obviously this is far greater than our situation, but I used this to show justification of remaining in rebellion. That is how we have to work. Yes, I've created a hybrid Frankenstein approach that twists the form so that it is the least misleading, but it is NOT an ideal and still is confusing! So yes, I remain in rebellion and will continue to push back on this until FNMA does the right thing and change it.

FNMA can be fixed...first step would be to hire me.

 

[Deleted member 134708]

I'm with @residentialguy

I follow the instructions as printed on the 1004 form and 1004mc form. A reader of the report will receive the outcome of those printed instructions right in front of them. Not on a far away website buried in an FAQ.

I haven't had anyone comeback with "change things to match" as I've explained within report when don't.

I mistakenly made a post on this topic before I researched this forum to see myriad threads.

 

[residentialguy]

I'm with @residentialguy

I follow the instructions as printed on the 1004 form and 1004mc form. A reader of the report will receive the outcome of those printed instructions right in front of them. Not on a far away website buried in an FAQ.

I haven't had anyone comeback with "change things to match" as I've explained within report when don't.

I mistakenly made a post on this topic before I researched this forum to see myriad threads.

Do you do it like my example in this post? http://appraisersforum.com/forums/threads/1004mc-and-comps.206153/page-5#post-2574848
.

 

[Deleted member 134708]

@residentialguy

Read that post last night during my 2 hour "1004mc comment bender."

I have a 4 page attached market analysis. On this forum I only uploaded page 1. I do distressed trends, DOM, List/sale price all with commentary.

I fill out the form exactly how it reads and often 1004MC and page 1 trends don't match. I explain and have been using this excel spreadsheet since about 3 months into 1004MC implementation.

 

[residentialguy]

That's good. Just make sure your overall trends reflects a reliable trend. Your comps are not reliable...there's not enough data. You still state the comp data on the left side of the MC, but don't fill out the right overall trend side to mirror the comp data on the left side. Your overall trends is based upon your research and separate analyses of the neighborhood and shows what is actually happening with properties like your subject. That will always match page 1

 

[residentialguy]

@residentialguy
I explain and have been using this excel spreadsheet since about 3 months into 1004MC implementation.

One thing I would advise you doing is changing your "The data used in this report is considered Strong with an average sample size of 22.1 reports per month"
If I did a poll with 22 people...would you consider that to be a "strong" indicator of the whole area? Could these additional sales you used reflect a different trend than those properties like the subject?

Always give yourself wiggle room. ie This broader data used in this analysis is considered a reliable reflection of the subject's neighborhood, which was verified with interviews of local Real Estate Professionals.

 

[Deleted member 134708]

Within boundary I defined, I would conclude annualized 265 sales in a small area is strong. Opinion.

 

[residentialguy]

I'm not disagreeing with you, but it's unnecessary and is just more rope to hang you with. Just trying to help. It's not pretty in court and they will hit you on every front. Appraisers get hung with their precise opinions. Give yourself room to move. I said the same thing you did, but didn't box myself in to be proved statistically wrong, plus I covered myself saying that the data was verified, as they will twist it around point out that your data is misleading as it is completely irrelevant to the subject.

 

[Webbed Feet]

Thank You Denise, <....snip....>.

Gender dysphoria is everywhere these days.

You all know the problem, behind this problem, is copious numbers of appraisers define neighborhood boundaries to be any place they find sales they want to use? For example, I am planning on defining anything west of the Rockies to be "the neighborhood" from now on so that I have lots of flexibility for comp selection...