1025 Form

[Webbed Feet]

Yes, Dodd-Frank threats. sometimes not so well thought out.

Here's how I would respond:

And, as a underwriter, here is how I would respond right back.

Specific adjustments for bed and bath counts were not adjusted separately but are rather included in the GLA adjustment which is supported by the current market and adjusted on a straight line format. An additional adjustment was not given as their was no market indicators warranting such an adjustment. GLA is first evaluated using trend analysis of similar-sized homes from the subject's market. Then, other influences such as condition, quality, etc are considered. Finally, the adjustment is refined using sensitivity analysis within the grid and tested for reasonableness with the selected comparables.

Reading your above, I take it this means you will have no trouble at all providing an addendum that specifically documents your market extracted proof that the market place for rental properties, in that location, views differences in bedrooms and bathrooms to either have no value, or to in fact really be in your GLA adjustment. Because, you have managed to contradict yourself. Is the adjustment part of the GLA or can it not be extracted out of the market? You can't seem to make up your mind on that, please document either or both. Oh, and while you are at it, please quote the pages out of some note worthy appraisal education text that goes into "straight line format" of GLA adjustments as well.

The rental comparables were strong indicators of market rent and the most similar found. To ignore these would be misleading. This is completely within USPAP, Fannie Mae, Freddie Mac and FHA guidelines.

Yes, well, my experience has been well over 50% of real estate brokers do not place "Actual Rents" on their listings in your area, most of them put made up rental numbers that they think are "Market Rents" that the properties should have rented for, but never actually did. So I want the names and phone numbers of everyone you called to verify those rents, as I am going to call them and ask when you first called them. Next, I want to know on those listings, that were first listed between six months ago and two years ago, precisely when was the last time those brokers updated their most likely guessed at or made up "Market Rents," or are those numbers back from two years ago? For your sake, I better find out those are current numbers and really were actual rents instead of broker made up numbers you failed to research and failed to disclose you used with assumptions they were meaningful when they were not.

Any further value pressure to adjust when no adjustment is warranted and to not use the best indicators of the market rent will be considered a violation of Appraiser Independence protected in the Dodd-Frank Act by unlawfully influencing an appraiser and encouraging a targeted value. This violation will be immediately reported to the Consumer Financial Protection Bureau, the ASC, all applicable State and Federal authorities and any related Government Sponsored Enterprises.

No problem. Tell you what, after I find out if you did quality research, or if your reporting and analysis is crap, I'll then consider an appraisal board complaint against your tail feathers. If I find you cannot support what you've done, you and I can do the "Appraisal Board Complaint/Dodd-Frank Act" dance, and we'll see who it is that lasts the entire dance, you or me.


Looking forward to continue our mutually beneficial legal relationship.

Oh yes! Certainly, myself also.

So to those that think they should cut and paste the above as a response over all of this..... Good luck to you!




Re

 

[Ca Ar Independent]

Please correct me if I am wrong. This is the way I see it.....
The 1025 has 7 approaches to value, VPU,VPR,VPGBA,VPBdrm, SCA,GRM, and cost approach. I do not make any adj. for bedroom or bathroom count, my adj. on GLA is very minimal $20-$50 depending on the SP of the property. My rental is usually very tricky being that rentals are not usually listed in MLS, the majority are posted in the newspaper. In this paticular instance I extracted rental data from the comps. that I used as the realtors were very efficient and recorded all the information that I need on there listings. Here is the issue the UW is demanding thru the :new_2gunsfiring_v1:AMC that I fill out the SCG just like the 1004 with bedroom and bathroom adj. also wanting me to replace my rental comps. does not like that I used the rental information off of my comparable, Additionally the AMC is telling me "I sincerely hope that we can all be willing to work together ,get through this particular file, and move on to continue a mutually beneficial working relationship???? WHAT DOES THAT MEAN....Oh and did I mention that they are also threating not to pay me.

I appreciate any comments, suggestions even constructive criticism.

Thanks!

FWIW, I make all attempts to find "actual" rents for my rental comps, from my files or by using actual, occupied properties. In my grid, I make the distinction between (A) $2,500 and (P) $2,500. I also comment on the distinction of actual rents vs. projected rents. I was taught NOT to use my sales comps as rental comps (well OK I could use 1 if there were no other comps) although the reasoning for this was not explained. The rental market in my area is strong, and rents are up so current rental information is critical. If you don't have a file, and your MLS does not have rental comps (mine does not) then I find that certain brokers tend to handle rentals, there are lots on Craigslist (I was surprised!) .
Also, I DO adjust the grid for bedrooms, bathrooms and additional units if warranted.

 

[Webbed Feet]

Fannie's 2005 forms.

<...snip....> Am I Crazy?

No, you are not. If you carefully compare Fannie's prior version of the 1025 form to the current version of the 1025 form it becomes easy to see the current form is a cluster .................. Especially when we consider an entire country full of residential appraisers had the newer form dumped on them with it full of sweeping changes in concept and use. I would say 80% of the appraisers still have no idea how to respond to half the changes. Just the utter breakdown in definitions of terms versus the market place is sadly comical.

Take GLA versus GBA. The prior version of the form did NOT have GLA in it anywhere, and I think correctly so. GLA, by definition, does not include below grade space. But when one bounces over into an analysis of income properties above and below grade space is NOT the consideration as it might be in SFR analysis. For example, this moronic new 1025 could have any appraiser showing a "Unit" with no "GLA" at all because the unit could be a below grade unit. Where the prior version of the form would have the appraisers indicating that all units indeed have GBA space.

The "Value Per ... Unit, Rm, GBA, Bdrms" section of the form at the bottom of the sales comparison analsis. The USPAP says that anytime we use the word "Value" in a report, it sure as ding dong had better be defined. Note that the ONLY definition of "Value" in this form is "Market Value." Read that defintion of Market Value and riddle me this. How does one have value, as per that definition, for things that cannot be sold? Can just one unit be sold, just one room be sold, just one bedroom be sold, or just one square foot of GBA be sold? IF one could sell one square foot of GBA, what would the "Market Value" of it really be in reality? IF we were to say Market Value of an entire property, including the land and other improvements, is $200,000 with a 1,500 sf GBA building, the form tries to imply that the so-called "Value Per GBA" is $133.33. This is purely hypothetical, as try to, in reality, advertise one square foot for $133.33 and find a buyer. Then, even funnier, try to transfer ownership of one square foot, or find one foot of GBA comps. If I were a potential buyer, I'd seriously discount that, would not you? Just prorating the taxes alone would be a hoot. Hey! We could have 1,500 owners in common! Weeeeeeee!

Seriously, it appears as if someone too interested in meaningless football team statistics was involved in this form design. Perhaps your appraiser is not a sports fan...

 

[gregb]

No, you are not. If you carefully compare Fannie's prior version of the 1025 form to the current version of the 1025 form it becomes easy to see the current form is a cluster .................. Especially when we consider an entire country full of residential appraisers had the newer form dumped on them with it full of sweeping changes in concept and use. I would say 80% of the appraisers still have no idea how to respond to half the changes. Just the utter breakdown in definitions of terms versus the market place is sadly comical.

Take GLA versus GBA. The prior version of the form did NOT have GLA in it anywhere, and I think correctly so. GLA, by definition, does not include below grade space. But when one bounces over into an analysis of income properties above and below grade space is NOT the consideration as it might be in SFR analysis. For example, this moronic new 1025 could have any appraiser showing a "Unit" with no "GLA" at all because the unit could be a below grade unit. Where the prior version of the form would have the appraisers indicating that all units indeed have GBA space.

The "Value Per ... Unit, Rm, GBA, Bdrms" section of the form at the bottom of the sales comparison analsis. The USPAP says that anytime we use the word "Value" in a report, it sure as ding dong had better be defined. Note that the ONLY definition of "Value" in this form is "Market Value." Read that defintion of Market Value and riddle me this. How does one have value, as per that definition, for things that cannot be sold? Can just one unit be sold, just one room be sold, just one bedroom be sold, or just one square foot of GBA be sold? IF one could sell one square foot of GBA, what would the "Market Value" of it really be in reality? IF we were to say Market Value of an entire property, including the land and other improvements, is $200,000 with a 1,500 sf GBA building, the form tries to imply that the so-called "Value Per GBA" is $133.33. This is purely hypothetical, as try to, in reality, advertise one square foot for $133.33 and find a buyer. Then, even funnier, try to transfer ownership of one square foot, or find one foot of GBA comps. If I were a potential buyer, I'd seriously discount that, would not you? Just prorating the taxes alone would be a hoot. Hey! We could have 1,500 owners in common! Weeeeeeee!

Seriously, it appears as if someone too interested in meaningless football team statistics was involved in this form design. Perhaps your appraiser is not a sports fan...

Good post webbed-one. You should be hired to edit this toolkit:

http://www.pmi-us.com/media/pdf/resourcecenter/toolkits/pmi_254-3_0106_AppRevTechMod.pdf

Guess we should be hoping that Freddie never updates the dated 71A and 71B forms.

 

[Webbed Feet]

Good post webbed-one. You should be hired to edit this toolkit:

http://www.pmi-us.com/media/pdf/resourcecenter/toolkits/pmi_254-3_0106_AppRevTechMod.pdf

Guess we should be hoping that Freddie never updates the dated 71A and 71B forms.

Perhaps I missed it, but pages 37 to 40 seem to be the place the writer of that would have, or should have, addressed those "Value Per....... " nonsense and..................... guess what? Nada! Should my reaction, once again, be "Oh Lovely!" or is that actually addressed somewhere in that? If not, I am very much not surprised at all.

 

[Howard Klahr]

Guess we should be hoping that Freddie never updates the dated 71A and 71B forms.

Which are grossly out of date due to significant changes in USPAP since these forms have been last updated. Pick your poison.