1004mc Soon Not To Be Required By Fannie Mae

[hastalavista]

. I smell something.

NC.....
I rest my case.

 

[Eli]

NC.....
I rest my case.

Hey, when one door closes, another one opens for professional real estate appraisals.

 

[djd09]

The current market prices reflect current market conditions. enough said

 

[Mr Rex]

With the Fed raising rates quarterly it’s not hard to predict that the 1004MC output may begin to show negative market conditions that would potentially bring into question Fannies continued propping up the market by gobbling up any loans not insured by FHA, VA , USDA et al . Fannie wanted the MC as evidence they were acting in good faith. They might not want so much evidence as an ongoing concern that will be required to cure the total FUBAR that has been mortgage policy for over a decade.

 

[NC Appraising]

NC.....
I rest my case.

Dont worry about it. You can say that sky was purple and I would believe you. Some on this forum has that respect, and you are one of them.

So feel free to spread the word.

 

[DWiley]

I was sitting in the same room as Denis. To me, it was a good news / bad news thing. Good news is the form is going away.

Bad news is the reason why. They looked at 2.8 million reports in areas where market was moving at least 5% up or down.

In increasing markets, appraisers still reported STABLE over 75% of the time. In decreasing markets, appraisers still reported STABLE 95% of time.

 

[NC Appraising]

My takeaway was that the intent was to get appraisal reports to adequately analyze the market and support its trend conclusion. Their review of a lot of appraisals (like, a million) determined that the vast majority of appraisals indicated "stable" even when the markets had increased or declined by more than 5% (and, I mean "vast majority"... like 80%+).

That isn't to say that the appraisers were fudging the numbers; their conclusion was, while the 1004mc's intent was good (ensure appraisal reports actually analyzed the data and made trend identifications based on those results), it wasn't achieving the results; what the reports were saying was in conflict with what was actually happening. Better to get rid of it than continue requiring it under those conditions.

Does anyone there say it as it is? Maybe I need to attend and tell them how it is in the real world....

Stable?

1. Appraisers can churn out more appraisals. Much quicker to mark stable and juice the value elsewhere. Takes a lot of extra work to prove increasing or decreasing. I have been making increasing adjustments for three years...I get heckled 20% of the time.

I love it when appraisers and lenders say...the sale closed within 90 days so I marked stable and made no market condition adjustments. LOL.

2. Appraisers were trained that way. I was. I was taught to always mark the middle. It made financing easeir. Ie, that is what the lender wanted.

3. Several AMCs and large banks sent out emails practically beggin us to make market condition adjustments.

4. The issue with the 1004mc is that most of the time it went against my graphs and other data. The data pool was just to small. It would have been more accurate if we could adjust the comps some how and then ran the data for the 1004mc.

 

[Eli]

I was sitting in the same room as Denis. Too me, it was a good news / bad news thing. Good news is the form is going away.

Bad news is the reason why. They looked at 2.8 million reports in areas where market was moving at least 5% up or down.

In increasing markets, appraisers still reported STABLE over 75% of the time. In decreasing markets, appraisers still reported STABLE 95% of time.

According to whom? I didn’t know they were expert appraisers in all markets. Let’s narrow it further to subject property.

 

[djd09]

They looked at 2.8 million reports in areas where market was moving at least 5% up or down.

Is there a link to this study? Or more hocus pocus like the magical letter that was never produced.

 

[NC Appraising]

I was sitting in the same room as Denis. Too me, it was a good news / bad news thing. Good news is the form is going away.

Bad news is the reason why. They looked at 2.8 million reports in areas where market was moving at least 5% up or down.

In increasing markets, appraisers still reported STABLE over 75% of the time. In decreasing markets, appraisers still reported STABLE 95% of time.

I'm being 100% serious when I say this.

Fannie, Freddie, lenders, AMCs need to send out monthly emails or whatever to tell us to make adjustments, report rrtracks, etc. And to stop doing it the way you were trained or to keep the volume up.

O yeah...send something out to the AMC reviews and UWs.....let appraisers make adjustsment... across the boad... market conditions etc. Stop busting chops.