Is The 1004mc Really All That Important?

[Peter LeQuire]

I reviewed and thought I had completed a file so I sent it out...turns out, about an hour or two later, I realized that I had a few blank "check boxes" in the MC; figure I had gotten side tracked going back and forth with trends, etc. I thought that I'd write myself a quick note and correct/resubmit later in the day.

The file was rejected before I got around to it. The rejection however, was to change "St" to "Ln".....that was it.

SO, is the 1004MC REALLY all that important or is the street/road ext. what makes or breaks the risk analysis?

The 1004MC addendum itself really is that important - because the client requires it. (Remember the Lola Principle.)

Each appraisal for which it is required is also a reminder of its reason for being introduced and required in the first place - appraisers weren't providing any meaningful information about neighborhood composition or trends.

As to the only correction requirement being to change "St" to "Ln" - 'tis but another reminder that GSE -related appraisals are less and less a valutation document but more and more a compliance document. (Remember the example of Yossarian and Snowden.)

 

[J Grant]

Each appraisal for which it is required is also a reminder of its reason for being introduced and required in the first place - appraisers weren't providing any meaningful information about neighborhood composition or trends.

Too often see these blanket statements that a) make negative assumptions about all appraisers 2) blame appraisers for every regulatory change or Fannie requirement. The fact is that many appraisers provided meaningful information about trends and neighborhoods, but from Fannie's viewpoint is the appraisers presented information differently. Furthermore, what was meaningful to one appraiser may not be meaningful to another, or to Fannie for their needs.

The MC form presents (or tries to) the information in a standard format to make sure it is present in all appraisals, as well as including the information deemed meaningful to Fannie..

That said, the MC format grid is weak, the way MLS or different data sources calculate the information can vary, appraisers can edit it (a strength and weakness depending on viewpoint) and because the MC data is limited, most cases has to be accompanied by additional broader market analysis and data. This broader data and market analysis along with focus on comps for/ subject neighborhood likely needs to be done anyway, but the awkward MC format and client confusion about matching from page one to the MC form can needlessly complicate the analysis.

 

[TRESinc]

Too often see these blanket statements that a) make negative assumptions about all appraisers 2) blame appraisers for every regulatory change or Fannie requirement. The fact is that many appraisers provided meaningful information about trends and neighborhoods, but from Fannie's viewpoint is the appraisers presented information differently. Furthermore, what was meaningful to one appraiser may not be meaningful to another, or to Fannie for their needs.

a lot of those statements are true. i would guess that maybe 45% of the reports i review have the neighborhood trends on the 1004MC match page 1 and/or the numbers match the top of page 2. similarly about 6 out of 100 reports i review have a H&BU analysis with the other 94 only having checked the box. there are far more reports completed incorrectly than there should be. it doesn't matter if it is meaningful to the appraiser or not, it is their responsibility to complete the report in the manner it is supposed to be.

 

[Tom D]

the sold to sale price ratio is helpful when you use a listing. i think you can make the 1004mc sing any song you like to hear.

 

[bnmappraisal]

i think you can make the 1004mc sing any song you like to hear.

Sadly, I think you're right.

 

[Joe Flacco]

It's not the 1004MC that is important. It is market conditions analysis that is important.

 

[erockinaz]

If you bother to read the instructions on filling out the 1004MC, the "One Unit Housing Trends" section on page 1 should match the 1004MC.

Q17. Are the trends that are reported on the Market Conditions Addendum to the Appraisal Report (Form 1004MC) the same trends that are to be reported in the One-Unit Housing Trends section of the appraisal report (Form 1004)?

Yes. The conclusions regarding trends that are obtained from the Form 1004MC must be the same trends reported in the Neighborhood trends section of the Form 1004. The information reported on both forms must be consistent to provide the lender with a clear and accurate understanding of the market trends and conditions present in the subject neighborhood, based on properties that are considered competitive with the subject being appraised.

https://www.fanniemae.com/content/FAQ/appraisal-property-report-faqs.pdf

Yes, but oftentimes the 1004MC is statistically meaningless, where an analysis of all properties in the neighborhood gives better trending information. I can cherry pick info to make the 1004MC say anything that i want, but pulling all residential sales in a given neighborhood is just that. So I do a market analysis on the first page and it is different from the 1004MC, 146 sales over the past year paints a better picture regarding market trends than 12 similar sales over the past year. I analyze both, I put both in the report. The user can read it and make any necessary determinations from the data. If I'm doing it wrong, then so be it.

 

[djd09]

if it was so important why not uad it? nobody reads that poorly made up form.

 

[timd354]

Sadly, I think you're right.

Isn't that pretty much true of the entire appraisal report?

 

[DWiley]

Yes, but oftentimes the 1004MC is statistically meaningless, where an analysis of all properties in the neighborhood gives better trending information. I can cherry pick info to make the 1004MC say anything that i want, but pulling all residential sales in a given neighborhood is just that. So I do a market analysis on the first page and it is different from the 1004MC, 146 sales over the past year paints a better picture regarding market trends than 12 similar sales over the past year. I analyze both, I put both in the report. The user can read it and make any necessary determinations from the data. If I'm doing it wrong, then so be it.

I hope you can help me out. Where can I find the list that tells me the Fannie Mae stuff I can ignore versus the stuff I cannot ignore?