1004MC & Neighborhood Section page 1

[residentialguy]

When you sign the certification you are basically saying that you have read and followed the directions for completing the form, including the 1004MC.

I guess this is where we will part ways. I believe that when you sign a legal document, the document has meaning. I'm not worried about it...I give them both neighborhood and comparable analysis. I'm not worried about getting sued for pointing out the differences within the neighborhood and the comps. I would be for not pointing them out. But that's me. MC for Neighborhood (pg 1), MC for comps (pg 2).

Learn How to Use the New Market Conditions Addendum
Gain an understanding of and recognize the sources of market information necessary to analyze market conditions. Our new recorded training is organized to address the Market Conditions Addendum (Form 1004MC), effective April 1, 2009, section by section. Also review the FAQs for additional information about the form and other appraisal topics.

• View Recorded Training
• FAQs (.pdf)

Oh goody...maybe they'll have a nice video on part 1 of the 1004D too, telling us that it is not an appraisal and we can just check and sign.

 

[The Argus]

I am comfortable with how I complete the form. I have taken classes on the form (prior to the form being required). I have discussed the form with many other appraisers. I have also viewed the AI tutorial and read the Fannie FAQs. I have even gotten anonomyous opinions from the AF (LOL).

 

[The Argus]

The video is way better than discussing it with a person. Theres no room for misinterpretation when watching a video, thats for sure.

 

[Mike Kennedy]

I guess this is where we will part ways. I believe that when you sign a legal document, the document has meaning. I'm not worried about it...I give them both neighborhood and comparable analysis. I'm not worried about getting sued for pointing out the differences within the neighborhood and the comps. I would be for not pointing them out. But that's me. MC for Neighborhood (pg 1), MC for comps (pg 2).



Oh goody...maybe they'll have a nice video on part 1 of the 1004D too, telling us that it is not an appraisal and we can just check and sign.

Scope of Work for an Appraisal Update

The appraiser must, at a minimum:

1. concur with the original appraisal,
2. perform an exterior inspection of the subject property from at least the street, and
3. research, verify, and analyze current market data in order to determine if the property has declined in value since the effective date of the original appraisal.

Required Exhibits


For new or proposed construction, clear, descriptive photographs (either in black and white or color) of the completed improvements must accompany this report form

• Any other data--as an attachment or addendum to the appraisal report form--that are necessary to provide an adequately supported opinion of market value

Suggest reviewing the Certifications on the 1004D as well.:icon_idea:

https://www.efanniemae.com/sf/formsdocs/forms/pdf/sellingtrans/1004d.pdf

 

[DWiley]

I guess this is where we will part ways. I believe that when you sign a legal document, the document has meaning.

The sanctity of a document is defended by ignoring the printed directions of those who designed the document? I think the irony meter just pegged.


You are parting ways with Fannie Mae, not me. I didn't design the form or write the directions on how to fill it out.

 

[The Argus]

You are parting ways with Fannie Mae, not me. I didn't design the form or write the directions on how to fill it out.

Form does not supercede report.

Guidelines are guidelines, not hard and fast rules.

Just curious, were you appraising before there were forms to fill out Wiley?

 

[residentialguy]

I am doing the MC form correctly. FNMA wants comparables. This form is designed "to be as specific as possible" to the subject and "must compete with the subject". That is how I fill it out. Listen to the tape again and you will hear them say these words.

These results may or may not support the overall trend of all sf homes in the neighborhood. Typically they do, but not always. The neighborhood section is not designed for specific comparables only. They want 1 unit housing info and trends. I give them that. So now they can look at the similar housing trends as well as all the sf trend.

 

[DWiley]

The neighborhood section is not designed for specific comparables only.

That is where your interpretation differs from those who designed the form. Fannie says that part of the NEIGHBORHOOD section addresses the entire neighborhood and part of it (the trends) addresses the subject's specific submarket.

I am not saying that is how I would design a form, but that is what Fannie says is their intent with the 1004.

When I use the DWiley form (which I often do in complex assignments) then I report relevant data about Market Conditions in the manner I think is best. When I use Fannie Mae form I try to follow Fannie's directions regarding reporting.

 

[residentialguy]

Watch the video. Look at the 4th slide of "fred mac/FNMA form 1004MC". "The new form is designed to be as specific as possible"

Go to "First section of the New Form" slide and they state "the sales dates and properties must be properties that compete with the subject's real estate".

View Recorded Training

So yeah, I guess I agree with Jay here.

The video is way better than discussing it with a person. Theres no room for misinterpretation when watching a video, thats for sure.

 

[residentialguy]

Fannie says that part of the NEIGHBORHOOD section addresses the entire neighborhood and part of it (the trends) addresses the subject's specific submarket.

Unless I'm misreading you, I think you've got this completely backwards.

Look at the FNMA clarifications announcement.
https://www.efanniemae.com/sf/guides/ssg/annltrs/pdf/2008/0830.pdf

Notice when they talk about the MC the don't say all sf sales, they say "comparable" sales. Big difference.

And then they clarify "comparable" on pg 5
Requirement Regarding the Appraiser’s Selection of Comparable Sales
Selling Guide, Part XI, Section 406.02: Selection of Comparable Sales
The Selling Guide states that when a property is located in an area in which there is a shortage of truly comparable sales—either because of the nature of the property improvements or the relatively low number of sales transactions in the neighborhood—the appraiser may need to use as comparable sales properties that are not truly comparable to the subject property...


There is no doubt in the language that the MC is about comparables. It is not about all SF sales in the neighborhood.

The problem is not with the 1004MC form, it's with the NEIGHBORHOOD section and the instructions of the 1004MC are saying they only want comparable sales data in the NEIGHBORHOOD section on pg 1 of the 1004, instead of the whole SF (1-unit) market in the neighborhood, as indicated on the form.

This is very dangerous, imo, because the surrounding properties may indicate significant changes and influences.

I don't mind including the comparable sub-market of the neighborhood in ADDITION to the whole market, but not in lieu of.