1004MC Help Please

[Carnivore]

To many variables when jumping neighborhood to neighborhood.


IMO- the last line (sentence for the grammar freaks) appears to have been part of the practice for years and would appear to be supported by the 1st paragraph. IMO-sorting out the subject specific zoning vs the competition is not a 1-day event for verification purposes and would appear to support the theory of "complex issue's" in each & every report.

So what your saying is a pretty good argument that sending in two to three Desktop assignments daily and the per fee offered is actually Chump Change only Chumps would do!

The Size of the Report has nothing to do with the Fee received.

 

[Terrel L. Shields]

With all respect. the 1004MC form references COMPARABLE sales or listings only. Providing anything other than or over that is a misuse of the form

who (lenders) still uses the form? And why?

be aware of the varying conditions that characterize different types of neighborhoods.

I live in an area where there is no "other side of the tracks" and "neighborhoods" are not so selective as to be a detriment to the buyers being mobile enough that they might chose from any number of small and medium sized towns to live in. The demographics at a minimum reflect entire school districts - which in my county is roughly areas 10 miles x 20 miles on average. Other than an occasional buyer who wants to be in a particular school district, buyers here are rarely driven by any real motivation to select by geography, rather price and prices of similar size, age and style homes are rather static between towns and school districts.

If you work in Bentonville at Walmart, then you might live in Bella Vista, Centerton, Rogers, Pea Ridge, or even Springdale, Lowell or commute from Gentry, Gravette, Decatur, or even Siloam Springs (some 30 miles). Bentonville itself is the more expensive place to live, but the average house there is larger and more expensive. Land is highly variable here. I have lots within 1 mile of me that are selling for $80k... those same lots sold for $11,000 each when the subdivision went under in 2010.

 

[shrubberyvaluation]

who (lenders) still uses the form? And why?

I live in an area where there is no "other side of the tracks" and "neighborhoods" are not so selective as to be a detriment to the buyers being mobile enough that they might chose from any number of small and medium sized towns to live in. The demographics at a minimum reflect entire school districts - which in my county is roughly areas 10 miles x 20 miles on average. Other than an occasional buyer who wants to be in a particular school district, buyers here are rarely driven by any real motivation to select by geography, rather price and prices of similar size, age and style homes are rather static between towns and school districts.

If you work in Bentonville at Walmart, then you might live in Bella Vista, Centerton, Rogers, Pea Ridge, or even Springdale, Lowell or commute from Gentry, Gravette, Decatur, or even Siloam Springs (some 30 miles). Bentonville itself is the more expensive place to live, but the average house there is larger and more expensive. Land is highly variable here. I have lots within 1 mile of me that are selling for $80k... those same lots sold for $11,000 each when the subdivision went under in 2010.

Direct lenders I work for only require it for FHA (because FHA wants it). Perhaps a lot of AMCs require it?

 

[jay trotta]

So what your saying is a pretty good argument that sending in two to three Desktop assignments daily and the per fee offered is actually Chump Change only Chumps would do!

The Size of the Report has nothing to do with the Fee received.

Fannie Mae expects the appraiser and the lender’s underwriter to be aware of the varying conditions that characterize different types of neighborhoods. Conditions that are typical in certain neighborhoods may not be present in other neighborhoods. This does not mean that the existence of certain types of conditions or characteristics are unacceptable; rather, it is an indication that they must be viewed in context with the nature of the neighborhood in which the security property is located. For example, some neighborhoods consist of a variety of property types that have different uses. It is not uncommon to find properties that have mixed-uses, such as residential properties that also have child-care facilities, doctor or dental offices, and other types of business or commercial uses. The presence of mixed-use properties or a variety of property types within a neighborhood should be viewed as a neighborhood characteristic that the appraiser considers when performing the neighborhood analysis and describing the neighborhood boundaries.

I voiced an opinion in regard to FNMA guidelines here, which appear to note one "neighborhood" characteristics may not be present in other neighborhoods. And

The appraiser must consider the influence of market forces, including but not limited to, economic, governmental, and environmental factors on property values in the neighborhood. Economic forces that must be considered include such things as the existence of vacant or boarded-up properties in the neighborhood, and the level of essential local support services. Examples of governmental forces that should be taken into consideration include the regulations, laws, and taxes that are imposed on properties. Environmental forces that must be considered include, among other things, the existence of a hazardous waste site on or near the property, and the proximity of a property to an airport. Certain other factors that are not appraisal factors, such as the racial or ethnic composition of a neighborhood or the age or sex of the individuals who live in a particular neighborhood, must not be considered in the valuation process.

the last line, things that must Not be considered. IMO-sorting out the subject specific zoning vs the competition is not a 1-day event for verification purposes and would appear to support the theory of "complex issue's" in each & every report.
In review, I do not see anything I said, in regard to the size of the report - nor a Fee, that would be determined by the individual who accepts the assignment. I was pointing out the complex issues under FNMA guidelines, that would require more than a 5-minute investigation (IE: Due Diligence) per zoning, one size does not fit all. There are some appraisers who can do 80 reports in a 70-day timeline, which I find interesting.

 

[Fernando]

For those that go against the instructions of the 1004MC and use all sales and listings regardless if they are comparables do you cross out the part that says "Sales and listings must be properties that compete with the subject property...?"

I'm not saying just use all the homes sold in neighborhood to do the 1004MC. That's the last resort.
We still should try to get most similar comps. I would start with narrow criteria and widen the criteria to get sufficient data to do a reliable analysis of what's happening in the market.
There's no clear cut easy way to do the 1004MC. Y'all have to use your knowledge and experience in choosing the right criteria.