1004mc Soon Not To Be Required By Fannie Mae

[Randolph Kinney]

I believe that was the driving force for the damn thing way back when.

Yeah, the check box was not sufficient to say what the market trends are. They wanted proof so we got the 1004mc form, with instruction on how to fill it out.

 

[George Hatch]

One problem with the checkbox conclusions is that they didn't provide context - "increasing/stable/decreasing compared to when"?

If the analysis went back 2 years and was reported quarterly the cumulative effects of the market conditions would be more apparent.

 

[Joe Flacco]

One problem with the checkbox conclusions is that they didn't provide context - "increasing/stable/decreasing compared to when"?

If the analysis went back 2 years and was reported quarterly the cumulative effects of the market conditions would be more apparent.

Not only that but you can have a neighborhood with values trending higher but in a specific subdivion or project have stable prices.

 

[George Hatch]

Don't even get me started on mkt segment vs neighborhood. It's usually not a problem with SFRs until it is a problem.

I've found that tracking the low-median-high stats for both GLA and price by year and going back 3-5 years provides come context for the most recent year's numbers. If I did more SFRs I might actually build an excel worksheet for that.

 

[NC Appraising]

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.

Think about what you wrote....please.

You owe me $5.00 for my hemmorade cream.

Are you saying just because you used 3 closed sales within the past 90 days the market is not increasing and market condition adjustment are not warranted?

I thought that was the theory of the churn and burn AMC appraiser. Well if I used 3 closed sales within 90 days that means the market is stable?

This makes me cringe when appraisers say this.

 

[Mr Rex]

I'm done with this place.

Good luck to all!

Wow

One problem with the checkbox conclusions is that they didn't provide context - "increasing/stable/decreasing compared to when"?

If the analysis went back 2 years and was reported quarterly the cumulative effects of the market conditions would be more apparent.

And if this data is/was available to Fannie and it was not made available to appraisers for analysis who is at fault.? Fannie aggregates all this data that could be useful to appraisers but withholds it and ? uses it against them? WTF?

 

[Evincere]

I've found that tracking the low-median-high stats for both GLA and price by year and going back 3-5 years provides come context for the most recent year's numbers. If I did more SFRs I might actually build an excel worksheet for that.

Absolutely

 

[George Hatch]

And if this data is/was available to Fannie and it was not made available to appraisers for analysis who is at fault.? Fannie aggregates all this data that could be useful to appraisers but withholds it and ? uses it against them? WTF?

Yeah, but how would that even work? If we already understand that neighborhood /= market segment and that the subject's own quality/condition can affect which data would fairly comprise a reasonable comparison then how would Fannie format the data to make it useful to the appraisers? I mean, we already have to identify our own market segments and analyze them anyway, even if/when that analysis is limited to the direct comps in the sales comparison.

I have no idea one way or the other, but if it were me collecting the data at Fannie and trying to identify the trends that are happening vs what is being reported I wouldn't be limit my comparison solely to the data from the last 12 months. If they're looking at 3yr trends and wondering why appraisers aren't making mkt conditions adjustments to comps that closed in the last 120 days it's possible that both sides might have a point.

One other explanation for appraisers not marking different boxes is if they consider the MC itself to be a filler on the basis of never getting any feedback from the users on it. If they think nobody is looking then why bother spending any more time on it?

 

[timd354]

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.

The reason the 1004MC was created in the first place is that most appraisals had no market analysis whatsoever and the 1004 MC was created long before AMC's were more than a bit player in the market. The reason I know why it was created is the person who created it told me....the people at Fannie knew the form was pretty crappy (which was due to some technical data collection issues they had at the time), but they just wanted appraisers to provide something that required at least some market data analysis.

The reason that they are doing away with it now is that most appraisers don't do a good job with it and always mark stable whether or not the market is increasing, decreasing or is stable and now that they get all of the appraisal and sales data uploaded through the UCDP, they can see the market trends for themselves

 

[George Hatch]

Expanding the time frames and going quarterly is a simple process from a worksheet perspective. Just add columns and tweak the dates.