1004mc

[residentialguy]

The correct way to handle this is NOT to expand the search parameters. Rather one needs to supplement the 1004MC data grid with additional information.

i know what you mean, but it might be mis-read. If I may:
The correct way to handle this is NOT to expand the search parameters for the 1004MC data grid on the form; that data never changes...it is what it is. That data will match the top of page 2. In order to find out the overall market trends, one needs to supplement the 1004MC data grid with additional information, such as expanding your search parameters. The results of that will give you reliable support to check the overall trends boxes correctly on the 1004MC and page 1 of the 1004 report.

 

[ucbruin]

Then you are doing it wrong and if your report gets in problem later with a buy back or other issues, providing an explanation of a boiler plate comment won' cut it. You are deliberately choosing not to match the trend on page one with result of MC form analysis, even though know the Fannie directive is that the trend section on page one must match results of MC form analysis.

It doesn't always match is because YOU choose not to make it match. YOU control whether trends on page one matches MC form/comp search ANALYSIS (the analysis, when grid MC data alone is too scant ). You are choosing to do it wrong even though this exhaustive thread leaves no doubt how it should be done.

Yup.
Because sometimes, based on the sales data, the MC trend doesn't reflect the current trends due to lack of sufficient comparable data.

What doesn't always match? The data on the left of it or the trend box on page 1?

Page 1 One Unit Housing sales range vs MC sales range don't always match. Example: condo. Page 1 reflects all condo sales within the subject's defined neighborhood. MC reflects comparable condo sales within the defined neighborhood.

 

[ucbruin]

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).

"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,."

Yup....
Bingo...
Boilerplate......

 

[ucbruin]

The Fannie FAQ specifically says not to expand he parameters just to have more data in the grid. I have completed many 1004MC data grids showing all zeros. Not a problem.

The correct way to handle this is NOT to expand the search parameters. Rather one needs to supplement the 1004MC data grid with additional information.

By the way, having all zeroes in the 1004MC data grid can provide support for why the appraiser had to use sales form outside the neighborhood or sales of properties that are not truly comparable.

Conversely, expanding parameters just to have data in the 1004MC grid can make a report seem contradictory. I have seen that in many reports. The grid has less than ideal data, and the comments address the lack of data, but the 1004MC indicats plenty of comparable sales in the subject's neighborhood. Tell the same story in every section of the report. If the grid indicates data is sparse, so should the 1004MC data grid.

The correct way to handle this is NOT to expand the search parameters. Rather one needs to supplement the 1004MC data grid with additional information.

Agree....

"By the way, having all zeroes in the 1004MC data grid can provide support for why the appraiser had to use sales form outside the neighborhood or sales of properties that are not truly comparable."

Agree...
On occasion I have had all zeros on my MC.

"Conversely, expanding parameters just to have data in the 1004MC grid can make a report seem contradictory. I have seen that in many reports. The grid has less than ideal data, and the comments address the lack of data, but the 1004MC indicats plenty of comparable sales in the subject's neighborhood. Tell the same story in every section of the report. If the grid indicates data is sparse, so should the 1004MC data grid."

Agree....
There have been times my MC has 1 sale for 7-12 months with sale price of $300,000 and 0 sales 4-6 months and 1 sale 1-3 months with price of $250,000. MC shows declining values but overall the market is not declining, just a statistical glitch due to lack of sales data for my subject type within a defined "neighborhood". I run additional data and report reality, which the MC may not always reflect.

 

[J Grant]

Ucbruin "Page 1 One Unit Housing sales range vs MC sales range don't always match. Example: condo. Page 1 reflects all condo sales within the subject's defined neighborhood. MC reflects comparable condo sales within the defined neighborhood."

No, MC is supposed to reflect the comps for your subject...whether they are located in the defined geo neighborhood or not. Where are you getting your comps for the page 2. sales grid? THOSE comps, they may or may not be the condo sales in the defined neighborhood, right? THOSE comps, and related that you would consider for the page 2 grid is what is supposed to populate the MC form AND the trend box section reflects the analysis of those comps (supplemented by additional relevant to subject/comp research if need be to form an analysis. The supplemental data may not be on the MC form grid)

One unit housing salesis NOT limited to the MC form data, that section includes all the condo sales in the neighborhood. ONLY the 3 boxes in the trends section on page one is populated by analysis from the MC form.

 

[Elliott]

So if I don't have data, I'm suppose to say so? But I have UWs who are always asking for that bracketing comparable and UAD checkers that can't handle a divide by zero, because its infinity and don't understand what N/A means. In a small market, I'll expand the parameters, because I'd like the report to be meaningful, not a report that looks like I did half the job. To say Fannie says not to expand parameters indicates Fannie has never done a report in the real world. Fannie lives in the perfect subdivision with pair sales and bracketing for every property where properties turn over at the ideal rate.

 

[ucbruin]

By the way, having all zeroes in the 1004MC data grid can provide support for why the appraiser had to use sales form outside the neighborhood or sales of properties that are not truly comparable..

Ucbruin "Page 1 One Unit Housing sales range vs MC sales range don't always match. Example: condo. Page 1 reflects all condo sales within the subject's defined neighborhood. MC reflects comparable condo sales within the defined neighborhood."

No, MC is supposed to reflect the comps for your subject...whether they are located in the defined geo neighborhood or not. Where are you getting your comps for the page 2. sales grid? THOSE comps, they may or may not be the condo sales in the defined neighborhood, right? THOSE comps, and related that you would consider for the page 2 grid is what is supposed to populate the MC form AND the trend box section reflects the analysis of those comps (supplemented by additional relevant to subject/comp research if need be to form an analysis. The supplemental data may not be on the MC form grid)

One unit housing salesis NOT limited to the MC form data, that section includes all the condo sales in the neighborhood. ONLY the 3 boxes in the trends section on page one is populated by analysis from the MC form.

"No, MC is supposed to reflect the comps for your subject...whether they are located in the defined geo neighborhood or not."

I disagree.
Comparable sales to complete the Sales Comparison Approach section, by all means, expand your search parameters beyond defined neighborhood.
But not on MC form....

"One unit housing salesis NOT limited to the MC form data, that section includes all the condo sales in the neighborhood. ONLY the 3 boxes in the trends section on page one is populated by analysis from the MC form."

Isn't that what I've been saying regarding the One Unit Housing section?
And I agree with you regarding the MC form and Trends...I just don't do it.

JG,

So I take it you've never filled an MC form with all zeros?

 

[residentialguy]

So I take it you've never filled an MC form with all zeros?

I have on many occasions. The data is what it is. There are no comps within the subject's neighborhood. Zeros are what you put down on the 1004MC data.
Now, what is the overall market trend for similar properties? You still have to answer that question because they ask it on pg 1 and on the MC form. Obviously you need to do further analyses to find that answer out. You do whatever it takes to get the answer and then you show (in additional comment section) your additional work that you used to find that answer. Then you mark the appropriate boxes. Your data grid stays with zeros. Your other work supports your trend boxes.

 

[J Grant]

Good point Ucbruin on your last post!

 

[Terrel L. Shields]

The appraiser has no idea if a client will sell a loan to FNMA

Only approved lenders sell to FHA or Fannie mae. Any old bank cannot foist a loan off on F/F. And some who do sell have separate divisions. To do secondary market in one bank you get the order from Appraisalport. The rest -residential or commercial- comes through RIMS.