1004mc

[Joe Flacco]

Not to nitpick, but to clarify...Data is populated into the form . From that data, and applying additional market analysis to that data the appraiser needs to form "good" opinions (reliable, credible opinions). If the appraisers comes up with "bad" opinions, it is not the data's fault or the form's fault.. It is the appraiser's fault.

Lack of data (few sales or listings) or uneven , wide range of prices are more difficult to analyze, but if they reflect that segment of the market, there is nothing to stop appraiser from doing additional research (which can include referencing past appraisals) to reach credible conclusions. If all data all the time was plentiful, conforming, and easy to explain, we would not be needed. The fact that the RE market is "messy" is why human analysis is needed (so far).

Yes. What I am saying is that we must do additional analysis. Not optional. The 1004MC format is not reliable enough to develop price trends.

 

[hastalavista]

Does fannie have definitions of increasing or decreasing? Does one consider a change in the median sales price of .01% or 1% or 10% the line of increasing or decreasing. What if on a 5 year trend it is decreasing and the one year trend is increasing wouldn't the results on the 1004mc be misleading?

Do you need Fannie to tell you how to analyze a market and make your conclusions? I assume you don't.
But what Fannie has done is to include a form which forces appraisers to do some analysis. If any appraiser doesn't like or believe the analysis that is completed by the form alone presents a credible summary of the market, then the appraiser (per USPAP) is required to augment, supplement, expand, etc., that analysis so that the appraiser can make the conclusions it determines is reliable.

Your argument implies that you have no control over your analysis, conclusions, and what your appraisal reports. That simply isn't true.
What you do have (for GSE work) are format requirements that must be followed in order to meet their appraisal-acceptance guidelines.
You cannot provide a GSE-bound report on a GPAR form. I'm assuming you have no big issue with that.
So who cares what additional forms the GSE requires because those forms do not dictate what ultimate analysis needs to be done or box-in an appraiser to report something that s/he doesn't believe should be reported in that manner.

The only argument I think is valid is,

"I really don't like this form even if the GSEs want it. I have to effectively provide an additional analysis. Without the form, I'd provide that analysis anyway. With the form, I now need to do additional work which doesn't add any credibility to my results. I think if I'm going to have to do additional work that I don't think is really necessary (regardless if the client thinks it is or not) then I should charge more money for that time I'm wasting."​

Is that your argument? If it is, I wouldn't argue against you but with you.

 

[J Grant]

Yes. What I am saying is that we must do additional analysis. Not optional. The 1004MC format is not reliable enough to develop price trends.

I partly agree. The MC FORMAT may not be reliable enough ( data on MC grid) but the research focusing on the the comps and properties most relevant to the subject is supposed to be reliable enough to develop price trends. Of course we can supplement it with as many additional searches or narrative/comparison to larger market /neighborhood activity,. But the MC form, flawed as it is, was put in to force appraisers to focus on the comps and activity most relevant to the subject and apply as trends to subject . THAT is what Fannie wants and clients expects since a client assumes appraiser is following the Fannie directive..

I believe it came from possibly Fannie seeing too often appraisers apply a general market trend of a 15% year price increase as a time adjustment, when in fact the only increase seen in relevant subject market /property type was 2%. (for example).

 

[Joe Flacco]

The MC FORMAT may not be reliable enough ( what is on the grid), but the research limited to those comps most relevant to the subject is supposed to be reliable enoug to develop price trends. Though we can supplement it with as many additional searches as we want and compare it to general market or neighborhood activity, the MC form, flawed as it may be was put in to force appraisers to focus on the comps and activity most relevant to the subject. THAT is all Fannie wants and what clients want by extension..

Fannie is sick of appraisers applying a general market trend of a 15% price increase when in fact the only increase seen in relevant subject market /property type was 2%. (for example).

I don't know why you are arguing with me.

I didn't say anything to suggest appraisers should apply general market trend of 15% when the relevant property type increase is 2%. I said I don't believe that additional analysis is optional given the format of the MC form. I didn't say anything more than that.

 

[J Grant]

I don't know why you are arguing with me.

I didn't say anything to suggest appraisers should apply general market trend of 15% when the relevant property type increase is 2%. I said I don't believe that additional analysis is optional given the format of the MC form. I didn't say anything more than that.

That was my example, of why the MC form wsa put in, not meant to argue with you. I agree additional analysis is needed, but imo it's up to the appraiser how much or how little they feel they need. If an appraiser is out in the market every day and running comps interacting with participants etc , the appraiser should have an idea what the larger market is doing, though running a search and retaining it in the work flile ( or attaching as exhibit) provides visible support.

 

[djd09]

What i will say is that the market is a big ocean and to expect me to tell you how high the waves will be when i can't see them is ridiculous.

 

[djd09]

And or the current sales reflect current market conditions. there you go

 

[hastalavista]

What i will say is that the market is a big ocean and to expect me to tell you how high the waves will be when i can't see them is ridiculous.....And or the current sales reflect current market conditions. there you go

Thanks for the example of your market analysis.

 

[Mike Garrett RAA]

I have met Mr Heyn...not sure he remembers me. I have also attended a seminar with Fannie reps in Denver and was doing appraisals for them. One of the things that impressed me was the attitude of the person who was handling their REOs and how he seemed very concerned about how much appraisals were costing Fannie on a national basis. I finally gave up on doing their REO appraisals as I could make more doing other work.

The 1004 should be revised on a regular basis such as a 5 year cycle. The format should be determined by both the users AND appraisers. The MC form also needs some revision. Maybe the two should be combined into a new 1004. How about a national symposium with representatives from Fannie, Freddie, FHA, and VA as well as a cross section of appraisers from several different regions of the country? One week in Hawaii. I'd volunteer for that!

 

[djd09]

"CLEVELAND HEIGHTS, Ohio — A Beachwood man has been accused of orchestrating what officials say is the largest mortgage fraud scheme in the history of Ohio and possibly the entire country.

Uri Gofman, 36, has been indicted by a Cuyahoga County grand jury along with 40 people and four companies in a conspiracy that prosecutors say involved 453 homes in Cuyahoga County and $44 million in fraudulent loans."

http://blog.cleveland.com/metro/2009/08/cuyahoga_county_investigators.html

Again i cannot analyze fraud.

Foreclosures, shadow markets, seasonal markets, interest rates, schools, taxes, zoning, inflation, elections, commercial real estate, epa, tax levies, jobs, job creation, wages, sports, investments, tax dollars, street repairs, and the price of rice, are all factors that may or may not affect the overall real estate market. So what do you want me to say, i will do all Rome Requires.