1004mc And Comps

[Bobby Bucks]

Yep, appraisers need to do better work. Check. But please spare us the zeal of the newly converted when those who for decades bought substandard work (while originating substandard loans) suddenly discover that the product they ordered isn't acceptable product.

It is fascinating that for so many years those in power willingly and willfully engaged the bottom of the barrel to rubber stamp a product that would fatten their own wallets, yet suddenly they get religion and with self-righteous indignation blame the entire profession and browbeat those whose services they didn't need during their boom times.

 

[DWiley]

Yes, I was told by people at Fannie that it was designed that way due physical formatting issues with the paper/pdf form (for scanning or whatever other purposes they had - this was pre-UAD/UCDP) that there was only room for 3 columns, not 4 columns (1 for each of the past 4 quarters). Sounds pretty silly to be sure, but that is what I was told be those you were there at the time.

I was told the same thing.

 

[djd09]

I cannot analyze fraudulent markets without being misleading.

 

[djd09]

It not being in a UAD format tells me they do not think it is that important.

 

[timd354]

I cannot analyze fraudulent markets without being misleading.

How can a market be fraudulent? While there may be fraudulent transactions in the market and there may be fraudulent market participants, the market is what the market is and a competent, skilled appraiser can analyze any market and communicate the results of that analysis without being misleading. Of course, those appraisers who are not competent and skilled have trouble doing much of anything without being misleading

 

[timd354]

Silly indeed. I'm sure there will be a improved revised format for the MC form coming out at some point in the future.

My guess is that the information in the 1004MC will be incorporated into and made a part of the standard Fannie/Freddie appraisals forms (such as the 1004) at some point when they get around to redesigning the appraisal forms....which won't happen for quite a few years probably since that is an extremely large and complex undertaking since that would also require modifications to the UAD and UCDP

 

[djd09]

How can a market be fraudulent? While there may be fraudulent transactions in the market and there may be fraudulent market participants, the market is what the market is and a competent, skilled appraiser can analyze any market and communicate the results of that analysis without being misleading. Of course, those appraisers who are not competent and skilled have trouble doing much of anything without being misleading

Doesn't fraudulent transactions and fraudulent market participants make a fraudulent market. And when extracting fraudulent market data for a market analysis make that analysis misleading? Check

 

[Rich LeMond]

I brought this up in another thread and nobody could even agree what "truly comparable" meant.

 

[residentialguy]

We all know the problem with the 1004MC especially in rural markets or markets with little activity. We're advised to only use truly comparable sales which often leaves us with an inadequate sampling. But A Fannie FAQ talks about using comps that are not truly comparable.

Does this perhaps mean that we can use more sales to populate the 1004MC?

Yes and No.
The data in the inventory analysis one the left side of the 1004MC is strictly for comps in the immediate neighborhood. This cannot be expanded. And by comps, that means that they are similar properties that you could easily use in the grid without huge adjustments. This information must also match the top of page 2

The Overall Trend on the right is expanded, as there is never enough data for comparables only to be reliable enough to show market trends. You must explain it and show your additional analyses used to support the overall trends. Keep in mind that this must still represent what the comps are doing, which takes geo competency of the neighborhood. (it could be that the comps are moving in a different direction than the neighborhood, eg. gentrification.) This overall trend info is to match page 1.

Here is an example of one I recently did. Please excuse the crayolas, lol They are to help show you what I mean...they weren't in the report.


My analysis in the additional comments supporting my overall trend and page 1

 

[Joe Flacco]

A whole bunch of geeks in here