I am an UW reviewing appraisals for a large bank. As all of you are probably aware, FNMA is now giving full indemnification for appraisals that score 2.5 or less. There are two areas that drive up the score if they do not match what the FNMA collateral UW thinks they should be:
1) The condition rating- obviously it looks at previous reports for this property and age and if the rating is not what they think it should be it drives up the score. These variances are usually explained in the description of the condition on page 1.
2) The adjustments is the other big area and this is the area that I have a question on. For instance, in California an appraiser puts the adjustment for site and provides logic but the Collateral UW will be significantly different and this drives the score way up.
As an appraiser are the adjustments for these two areas ( condition rating from C3 to C4 or a site adjustment) driven by standard local market adjustments or paired sales analysis (extracted from subjects market place) for each loan? I am just wondering how FNMA is determining for example a site adjustment in LA county vs. what is being offered by the appraiser. In the example I am looking at the appraiser is reflecting a $10 sf adjustment and the FNMA model is $50sf in LA county? As an appraiser would you want to see this brought to your attention when these large variances occur if you have already explained your logic?
1) The condition rating- obviously it looks at previous reports for this property and age and if the rating is not what they think it should be it drives up the score. These variances are usually explained in the description of the condition on page 1.
2) The adjustments is the other big area and this is the area that I have a question on. For instance, in California an appraiser puts the adjustment for site and provides logic but the Collateral UW will be significantly different and this drives the score way up.
As an appraiser are the adjustments for these two areas ( condition rating from C3 to C4 or a site adjustment) driven by standard local market adjustments or paired sales analysis (extracted from subjects market place) for each loan? I am just wondering how FNMA is determining for example a site adjustment in LA county vs. what is being offered by the appraiser. In the example I am looking at the appraiser is reflecting a $10 sf adjustment and the FNMA model is $50sf in LA county? As an appraiser would you want to see this brought to your attention when these large variances occur if you have already explained your logic?