1004mc Soon Not To Be Required By Fannie Mae

[Evincere]

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.

I can’t like this more than once but I can repost it again. As I suspect Mr Rex nailed it.

There always has to be a WHY for such a drastic rebound and I really don’t believe the reason given for retirement of the form was the real reason. Was it a Plausible reason, sure. Is it Logical to pull it with no substitute analysis requirement? no. Because, it was better than little to no analysis at all.

 

[DWiley]

But I don't doubt that appraisals that should be marked increasing or decreasing are being marked stable either. I doubt many are doing market conditions analysis outside of the 1004MC form.

Exactly. That is why I do not view the dropping of the 1004MC as the good news that many see it as. The real message, in between the lines, is that they still are not getting meaningful market analysis, and even in markets where there is clear and significant change, most appraisers are still just going through the motions and marking STABLE. We have met the enemy....

 

[djd09]

And USPAP doesn't require a market condition form.
No link still, of course. What is that over under?
Double dipping too. Tell CAN i said hi.

 

[Terrel L. Shields]

I have always made adjustments for market conditions(time)

Since residential wise we rarely need comps past 3 or 4 months, it's hard for me to justify a conditions adjustment over such a short time without the likelihood I am only seeing random price fluctuation. That's like saying the stock market rose 1% because of some arcane index was in higher territory or gas prices jumped because Venezuela is in bad shape. Too many other variables at play.

 

[Mr Rex]

But I don't doubt that appraisals that should be marked increasing or decreasing are being marked stable either. I doubt many are doing market conditions analysis outside of the 1004MC form.

As if the 1004mc provides meaningful data within the form? In any appraisal I do I could provide dozens of 1004MC outputs with minor tweaks that would provide more meaningful results than Fannies suggested search criteria. The MC form was Fannies lash out to legitimize their buy back demands when market conditions were clearly increasing per Case Schiller et al but caught Fannie pants down when reality hit. Now it’s obvious that the data is not going to support Fannie or any other entity other than a full blown government insurer being involved and Fannie is simply trying to remove a readily observable market indicator from the mix before the bagpipes play amazing grace.

 

[djd09]

If Fannie has all this great data, proving appraisers are wrong, why do they not share? hahahaha

 

[Evincere]

Exactly. That is why I do not view the dropping of the 1004MC as the good news that many see it as. The real message, in between the lines, is that they still are not getting meaningful market analysis, and even in markets where there is clear and significant change, most appraisers are still just going through the motions and marking STABLE. We have met the enemy....

I happen to like the 1004 MC with good reason - I have ample data to pull. . Maybe slower markets in rural areas not so much and I get the disdain for its inefficiency. Plenty of data and robust markets enable good use of the form and I for one will continue to use it whether required or not.

If Fannie wanted good data on market trends imo they would go back 2 years or more. 12 months is a drop in the bucket.

And rarely do we actually meet the enemy. IMNSHO.

 

[hastalavista]

I'm done with this place.

Good luck to all!

 

[Tom Woolford]

Summary doesn't work well as for reproducing the same results. Eventually, the market will decline and those that say the market is rising or stable may need to be examined more closely less the lender has to buy back the loan when it defaults.

Deleted : thought better of it

 

[Joe Flacco]

Exactly. That is why I do not view the dropping of the 1004MC as the good news that many see it as. The real message, in between the lines, is that they still are not getting meaningful market analysis, and even in markets where there is clear and significant change, most appraisers are still just going through the motions and marking STABLE. We have met the enemy....

Well with most GSE appraisals going through large AMCs I say AMCs enable non meaningful market analysis. Maybe even promote it with their fee policy.