Bad advice from Fannie--"Multiple Parcels" from Dec. 2019 'Appraiser Update'

[glenn walker]

J Grant has gone off the rails : ) LMAO

 

[J Grant]

J Grant has gone off the rails : ) LMAO

Why - Because I called you on your saying that an adjoining lot can not be a build able lol?

I guess it was too good to be true. For a brief moment, the thread returned to a professional interchange, Maybe you were trying to be funny. Who knows. What I do see is a board getting out of control as nonsense interferes with any attempt to discuss an appraisal topic .
I hope others can continue the discussion. Off for the night.

 

[Andrei Fin]

I see that you understand, BUT, unfortunately the words in Fannie's recent newsletter mucked it up by asserting that an additional parcel--EXCESS to the improved parcel--and one thus having a H&BU separate & distinct from the improved parcel could be "lumped-in" (value-wise) with the improved parcel for a single opinion of "value" (which the article actually described as "value in use").

Effort is being made to get this resolved.

It most certainly can be appraised that way, because there's nothing that says a subject property must consist of only one parcel, and if you're appraising our adjoining improved and unimproved parcel as if separate parcels then you're appraising a hypothetical subject property.

 

[Meandering]

It most certainly can be appraised that way, because there's nothing that says a subject property must consist of only one parcel, and if you're appraising our adjoining improved and unimproved parcel as if separate parcels then you're appraising a hypothetical subject property.

Which is what I said all the way back in post #15.

However,

a "blanket" loan can cover multiple parcels, even with multiple current and/or different, Highest and Best Uses, but,

those aren't give on the same terms and interest rates as single family/owner occupied residential loans.

So even though appraisers can appraise multiple parcels for a single loan, they can't do it for a single residential mortgage if the scope of the work has been limited to what is acceptable to the GSEs. And since it is "the appraiser" who is responsible for the scope of the work, it is up to "the appraiser" to notify the client that "the property" might not meet the qualifications for GSE SFR residential mortgage, and that the scope "of the reporting" needs to be extended beyond the GSE minimum, if, the lender will be extending a different type of loan, based upon the property that will be securing the loan.

Appraisers have many tools, but all those people that want to disclaim their influence over appraisers, still, influence the appraisers and what the appraiser's reports should reflect in order to fit the "desires" of the lenders. Which, as you may know, is a pre-printed statement on the GSE reports, that, oh no, that did not happen that appraisers are being biased in favor of lenders to the detriment of borrowers and the value, or it's "direction". So,,,,,,,,,,,,,,,,,,,,,,,,,,,for the "intended use".....................not all properties fit the requirements for SFR primary mortgages, that have the lowest interest rates, and the longest terms. It is up to appraisers to say so. Not to say, okay, we'll just pretend it's something it's not, and not disclose our HC because the GSEs say we can.


.

 

[Carnivore]

I have a simple question for anyone:

I understand FAQ 153 Pg 254

and FAQ 154 Pg 254

I get the part about credible Assignment results!

Why are we responsible for a Clients Laws and Regulations that they must follow?

If they don't tell you about certain regulations; How do you know what Questions to ask as it pertains to the SOW or any other element of the Appraisal Report!

We have minimum Reporting Requirement per USPAP. USPAP is the Law we Follow. Why, because my and your state have adopted USPAP and its now state law.

FAQ's are situational. FAQ's are an extension of the Standards in USPAP. In other words we can not ignore what FAQ's say! We must incorporate the applicable FAQ within our Standard one & two if it applies to our Client and the intended users.

So here are once again the FAQ that are being discussed in these threadsexpiring USPAP) But it for the two FAQ below How would you know?

FAQ 176 Pg 262

FAQ 188 Pg 266

 

[J Grant]

I have a simple question for anyone:
I understand FAQ 153 Pg 254
and FAQ 154 Pg 254
I get the part about credible Assignment results!
Why are we responsible for a Clients Laws and Regulations that they must follow?
If they don't tell you about certain regulations; How do you know what Questions to ask as it pertains to the SOW or any other element of the Appraisal Report!
We have minimum Reporting Requirement per USPAP. USPAP is the Law we Follow. Why, because my and your state have adopted USPAP and its now state law.
FAQ's are situational. FAQ's are an extension of the Standards in USPAP. In other words we can not ignore what FAQ's say! We must incorporate the applicable FAQ within our Standard one & two if it applies to our Client and the intended users.
So here are once again the FAQ that are being discussed in these threadsexpiring USPAP) But it for the two FAQ below How would you know?
FAQ 176 Pg 262

We are not responsible for a clients laws and regs that they must follow. It is on them to put any requirements for appraisals that must adhere to one of their regs in the engagement letter. If there is a specific identified additional user in the engagement letter, such as FHA, they are identified, and since FHA has an approval list, the appraiser is expected to know FHA regs, The FAQ in USPAP are there to provide guidelines in how to solve specific appraisal problems . The SOW is up to appraiser to develop credible results .

 

[Carnivore]

Honestly, it looks more to me like the reasoning is based more on lender expediency as a user of these appraisals than as expert instruction on how to appraise.

They have seen what appraisers as a group apparently are/are not capable of delivering on a consistent basis and are simply choosing the path of least resistance. It's (probably) not malice or deceit or even ignorance, but expediency.

Look at the extent of disagreement expressed in this very thread among forum regulars, virtually all of whom have engaged in HBU threads in the past. If *this* group has that much disagreement about what is/isn't in such an assignment how can Fannie expect any better out of the entire appraiser population as a whole? Most appraisers never entertain these types of discussion.

Above, You have summed this problem up very well.

I think i know what the underlying problem(s) are in this specific situation.

1. The inflexibility of the form is number one.

2. The Opined Value at the bottom of Page 2 does not allow for a Value in Use. Why is that so important to this specific subject property physical and economic characteristics assignment? That is the total possible mtg amount and then adjusted for Loan to Value percentage/aka actual mtg amount.

It's something like a auto-fill transfer into the settlement statement and Deed of Trust Mtg Amount. and other parts of the total package paper work.

In other words the Value in Use is the total loan adjusted for LTV.

If I recall correctly when the new FNMA series came out we had an issue with the language in cert #23. That was fixed by rewording that language and putting it in an addendum.

So something like that is what they will come up with. The USPAPIANS will issue Guidance in the form of a AO. Just my humble opinion.

Someone initially has to be the complainer. I am not a complainer, I much prefer to be known as a Problem Solver.

I like to quote General Officers in the Military.

"If everyone is thinking alike, then somebody isn't thinking." General George Patton

"Don't bother people for help without first trying to solve the problem yourself. " General Colin Powell

"Great leaders are almost always great simplifiers, who can cut through argument, debate and doubt, to offer a solution everybody can understand." General Colin Powell

 

[J Grant]

I see that you understand, BUT, unfortunately the words in Fannie's recent newsletter mucked it up by asserting that an additional parcel--EXCESS to the improved parcel--and one thus having a H&BU separate & distinct from the improved parcel could be "lumped-in" (value-wise) with the improved parcel for a single opinion of "value" (which the article actually described as "value in use").

Effort is being made to get this resolved.

That is incorrect. The single opinion of value is the market value opinion for appraisal is for the 2 parcels/(improved and vacant ) conveyed together.
.
The value in use is only for the one parcel of excess land as its contribution to the total 2 conveyed together.

 

[Peter LeQuire]

Trying to cram an appraisal of any other property type (or of multiple properties) into the GSE single family form report is like trying to cram the ugly stepsisters' feet into the glass slipper.

 

[J Grant]

Sure it is possible ONLY if the vacant site is deemed to be surplus land or if H and B determines that improving the parcel would not be the highest and best use at this time.

Indeed, the fannie guideline is (if determined) improving the excess land parcel is not the highest and best use at this time, then for their loan purposes they want appraiser to deem the alt use value of the vacant site to be a value in use, for its contribution to the single market value opinion for the two ..

The problem I see is appraisers not making a determination that value in use is appropriate for the vacant site per their own analysis/market, but rather doing it because fannie say so,

As for your first statement, I don't see how an appraiser can deem an excess site to be surplus land. It is either excess land or it is not. However, as you said, the HBU for that excess land site might not be to improve it at this time, therefore it has a present day alternate use ( value in use, interim hold period use ) where physically it looks like surplus land but it remains a sever able excess parcel