1004mc And Comps

[Meandering]

Forms don't restrict analysis, people do.

I agree with this, but,

only up to the point where, dedicating time to fill out meaningless forms takes away from time that could be put toward a more meaningful analysis.
Time is not free, nor infinite when working on a report.

So yes, in some aspect, the form restricts the time that appraisers could allot to more in depth analysis and narration of market conditions.

.

 

[timd354]

We certainly have our share or rural properties in Tennessee. The 1004MC form works in any area, if it is completed correctly - because completing it correctly means adding more when that is needed.

The lazy form fillers don't seem to get the last part of your statement

 

[ucbruin]

Morning UC,

What was I thinking? lol

Forms don't restrict analysis, people do.

I agree with this, but,

only up to the point where, dedicating time to fill out meaningless forms takes away from time that could be put toward a more meaningful analysis.
Time is not free, nor infinite when working on a report.

RG,

W/o permission, I will piggyback on Marion's comment (my bold).

After reading many comments regarding the MC form, it appears that the creators of the form, the users of the form and the clients who rely on the form, can't agree how to properly fill out the form.

How in the world did the mortgage/appraisal industry survive this long without/before the MC form?

 

[J Grant]

I don't believe the MC form was meant to replace market analysis it is focused on smaller groups of the comps/competing properties, the issue from Fannie is insisting neighborhood on page one section matches MC form,

 

[DWiley]

Forms don't restrict analysis, people do.

I agree with this, but,

only up to the point where, dedicating time to fill out meaningless forms takes away from time that could be put toward a more meaningful analysis.
Time is not free, nor infinite when working on a report.

So yes, in some aspect, the form restricts the time that appraisers could allot to more in depth analysis and narration of market conditions.

.

It is all about having the right tools. Give me a property to look at in an area covered by my MLS system, and in less than 6 minutes I can have a populated 1004MC data grid, and I will have the the data necessary to do any other extended anlysis that I need to do. In that 6 minutes I am allotting 3 minutes to get basic info on the subject regarding size, age, lot size, etc. Yes, I have actually timed it.

Many just aren't using the right tools. Most 1004MC solutions that are baked into MLS systems and most spreadsheet solutions are designed to just fill in the 1004MC grid - and as I said, that is just the starting point. The better tools (like SMART) go far beyond that.

 

[residentialguy]

RG,

W/o permission, I will piggyback on Marion's comment (my bold).

After reading many comments regarding the MC form, it appears that the creators of the form, the users of the form and the clients who rely on the form, can't agree how to properly fill out the form.

How in the world did the mortgage/appraisal industry survive this long without/before the MC form?

Kind of expanding what JG said. This is the only way to fill out page 1 and the 1004MC without being misleading, in that page 1 certainly doesn't say comparables, like the 1004MC, therefore the overall trend on the 1004MC is not the results of the sparse data of the comps to the left of it...it is more of a macro view, as page one headings indicate, so now it's not mis-leading. This way of filling the MC and comments is being applauded by those that have close ties to FNMA, such as DWiley and TimD here. I agree that the form sucks. The 6mo, 3mo 3mo is wacked just as tying it to page one is wacked. It easily could have been improved by showing 4 quarters of year trend and having the appraiser fill out 2 MCs, one for macro and one for micro (comps).

As far as how did FNMA survive w/out the MC form...this is a typical Federal fix. Make appraisers fill out a form instead of training appraisers properly on how to research the market trends and take away the licenses of those that fail. (enforcement). But no, we still have the same appraisers filling out forms and still not having a clue. Forms don't make incompetent appraisers competent. As always, the results of FNMA is FAIL.

 

[KenAZ]

I think most appraisers are under the impression that there are two homes that exist that are not comparable. All properties are comparable. Yes you heard that right . . . All properties are comparable. Rural appraisers understand this better than anyone else. I am surprised to see a QA that uses the term "Truly Comparable" because that is not included in any USAP or FNMA guidelines. All that we are required to do is use the "Best Comparables Available." You can compare a 7,000sf home with a 400sf home. If that is the best comp you might even use it in the report. You can compare a condo in Florida to a mansion in Beverly Hills. You are going to be expanding a few search parameters and your adjustments are going to be crazy, but they are still considered comparable.

Now, you may ask . . . would you ever use these as comparables? Of course not, because we are required to use the best comparables available, and I am sure there are numerous nearby condo sales that would be considered better than using a Beverly Hills home as a comparable for a condo in Florida. So instead of saying that a home is not comparable, we should be using a more accurate term such as that the home is not one of the best comparables available, or even a term like "Poor Comparable Selection."

 

[Meandering]

I'm going to add to what Ken said,

we should be using a more accurate term such as that the home is not one of the best comparables available, or even a term like "Poor Comparable Selection."

These properties are not comparable because adjustments would exceed old Fannie guidelines, therefore my client won't let me use them, even though Fannie says it's okay. If I use them the computer QC checker of the AMC will whirr and spit smoke and fire, alarms will go off in Mumbai and I'll make the India Times as a lousy appraiser. Hence, they are not comparable.

Thank you.

.

 

[KenAZ]

Well yeah, clients do not follow any reasonable rules. The term "Best Comparable" cannot be determined by a computer. The computer can only try to determine "Comparable or not comparable." But even then the computer will spit out very strange results when it cannot find what it wants and will mislabel as "Comparables" properties that we would deem "Poor Comparables". The programmer has to program the comp selection parameters in a certain order of criteria. Is a recent similar size distant sale more comparable than an older smaller proximate sale? I am sure we will see a few meltdowns.

.

 

[Peter LeQuire]

Kind of expanding what JG said. This is the only way to fill out page 1 and the 1004MC without being misleading, in that page 1 certainly doesn't say comparables, like the 1004MC, therefore the overall trend on the 1004MC is not the results of the sparse data of the comps to the left of it...it is more of a macro view, as page one headings indicate, so now it's not mis-leading. This way of filling the MC and comments is being applauded by those that have close ties to FNMA, such as DWiley and TimD here. I agree that the form sucks. The 6mo, 3mo 3mo is wacked just as tying it to page one is wacked. It easily could have been improved by showing 4 quarters of year trend and having the appraiser fill out 2 MCs, one for macro and one for micro (comps).

As far as how did FNMA survive w/out the MC form...this is a typical Federal fix. Make appraisers fill out a form instead of training appraisers properly on how to research the market trends and take away the licenses of those that fail. (enforcement). But no, we still have the same appraisers filling out forms and still not having a clue. Forms don't make incompetent appraisers competent. As always, the results of FNMA is FAIL.

Fantasy quiz: what if the GSEs hadn't deluded themselves that they could pass their responsibilities for due diligence off to their seller services (DU is an both acronym and an expression of, "Oh, really?") with the threat of a repurchase demand the sanction? What if law enforcement agencies and the GSEs hadn't dismissed appraiser fraud, originator fraud, and collusion in the mortgage origination racket? What if the appraisal organizations had been more aggressive in sanctioning their incompetent and dishonest members?