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

[George Hatch]

I don't object if all 4 tests are virgin true. I do object when its dogmatic, simplistic, and without conceptual/intellectual admittance that there may be an alternative "market value" versus what some regard as the strict interpretation of H&BU as currently written that is not necessarily reflective of the real world market. Go ahead and say that DW is an idiot because he works for Freddie and they share this ideology of H&BU and their role and the appraisers role in the process. I dare you to throw your friend and cohort under the bus without eliciting a response. Similarly I would be willing to bet all I own that Santora would put his foot up your arse in the same way. Because they have chosen their own H&BU maximally productive roles in life? No because they see the big picture and the small or narrow minded are archaic. H&BU is not perfection as written and is fallible not only "sometimes" but often enough that the largest residential mortgage entity in the universe decided to make a public declaration of the failings as currently published and apparently interpreted by the appraisal elite. You and Lee and your cohorts should protest FNMA and the other GSEs and other Gubmint related mortgage insurers et al as they and the general public/market are too stupid for their own good.

Could you or Lee please repeat how this concept damages the public trust or the public interest as a GSE concept? I research and research and can't find a response other than "Get Off My Lawn You Sumbeech, I've been doing it this way forever!"

Again, skip the complaining and simply recognize that all you're doing is analyzing where your subject fits into the market. Is your property a house or is it an underimproved piece of land that needs to be cleared.


And this:

the public trust or the public interest as a GSE concept?

Doesn't exist as an appraisal standard. The reference in USPAP to the public trust is to the public trust in the appraisal profession. The GSEs are responsible for their own performance, not us.

If the lender wants to extend 95% financing to the extra parcel in that transaction then it makes no difference to us. If the lender doesn't want anything to do with a vacant land parcel, again, that makes no difference to us. What we *should* be objecting to is them asking us to obscure what it is they're doing with that extra parcel so that it won't be so obvious what they're doing.

 

[Andrei Fin]

It's not enough to support your value with genuine sales, you've got to use the best sales sorry. You promised the client right there in your certification that you used the most similar sales.

Lee's approach is the one that can be more accurately described as one size fits all (HBU=MV).

 

[George Hatch]

It's not enough to support your value with genuine sales, you've got to use the best sales sorry. You promised the client right there in your certification that you used the most similar sales.

Lee's approach is the one that can be more accurately described as one size fits all (HBU=MV).

The "best sales" will consist of the properties that are most comparable. The most comparable properties to the vacant parcel will be other vacant parcels. The most comparable properties to a 2-lot assemblage will be other 2-lot assemblages. You didn't even think to look for either. You went for the least desireable alternative of a single house on a lot and simply applying a lot size adjustment. You would only use that method as a LAST RESORT, after all attempts at the other two failed. Not as your default.

Meaning, YOU are the one who said you used the best comps even though you didn't even look for them.

And indeed, in the example you cited there was no need to use that less desireable approach because sales data does exist for both the vacant parcels and the 2-lot assemblages. The reason you were unaware of them was because you didn't look. The reason I was aware of them was because I took a couple minutes to take a look. If it had turned out the other way I would not have hesitated to go that other way because I don't really care which way it goes; I only care that I am following the data.

 

[Andrei Fin]

When was the last time you actually bought or sold property? I was never asked to appraise the property, why is this so hard for you to understand? I simply compared the home against other homes that my wife and I were shopping at the time. We were paying not a penny more for that property than we would have paid to acquire a property of similar utility and appeal on only one parcel. If someone felt that we had undervalued the property due to the development potential, they were welcome to come along and outbid us. The fact is that when we backed out, the next buyer offered the same amount, and the lot is still being used as a lawn today, and you're still here screaming B-B-BUT THE HIGHEST AND BEST USE to god knows who.

 

[Lee Lansford]

... Go ahead and say that DW is an idiot because he works for Freddie and they share this ideology of H&BU and their role and the appraisers role in the process. I dare you to throw your friend and cohort under the bus without eliciting a response.
...

You are speaking on behalf of Danny Wiley?

Really?

 

[Mr Rex]

Again, skip the complaining and simply recognize that all you're doing is analyzing where your subject fits into the market. Is your property a house or is it an underimproved piece of land that needs to be cleared.


And this:

the public trust or the public interest as a GSE concept?

Doesn't exist as an appraisal standard. The reference in USPAP to the public trust is to the public trust in the appraisal profession. The GSEs are responsible for their own performance, not us.

If the lender wants to extend 95% financing to the extra parcel in that transaction then it makes no difference to us. If the lender doesn't want anything to do with a vacant land parcel, again, that makes no difference to us. What we *should* be objecting to is them asking us to obscure what it is they're doing with that extra parcel so that it won't be so obvious what they're doing.

You and Lee keep suggesting that that is what is suggested or implied. Show me where it says that. Why is this issue different than FHA's take on excess versus surplus or the prior loan limits that didn't allow "jumbo" loans via FHA or VA etc? We appraise, they loan. We report, they loan, Does FHA not allowing the excess land to be included reflective of the "As Is" market value of the property as a whole? Can you point me to your and Lee's hue and cry to this travesty when it was enacted? Does land, even excess land have value? Why does FHA get a pass in the H&BU test? Does USPAP allow simply ignoring land with value because its "'excess" in FHA's loan program? Is this reflective of market reaction that appraisers are supposed to emulate?

 

[Mr Rex]

You are speaking on behalf of Danny Wiley?

Really?

Umm, he was reasonable and not stuck on himself or his personal opinions. No I do not speak for him, but I damn well wish he was still here to put you in your place. That I am reasonably sure of. Be ready for your next USPAP update courses. It may turn your delicate stomach....

 

[Lee Lansford]

Umm, he was reasonable and not stuck on himself or his personal opinions. No I do not speak for him, but I damn well wish he was still here to put you in your place. That I am reasonably sure of. Be ready for your next USPAP update courses. It may turn your delicate stomach....

You, sir, are a blowhard.

Be careful what you wish for--particularly when you are clueless in what you assert.

It was wise of you many years ago not to use your real name in your posts here. It gives you the protection that you need.

 

[Mr Rex]

A few random thoughts about H&BU and recent changes to USPAP. One person at one point supposed that it was the "immediate" use that was implied in one of the 4 H&BU tests, although it is not mentioned in USPAP. I guess you could use the rationale that as of the effective date of the appraisal that the H&BU of the 2nd lot had H&BU as sold separately, but given recent changes to exploring and analysis of exposure, another test is added. Would the 2nd lot sell at the presumed H&BU higher value as separate in an equivalent of less exposure time than as combined? When USPAP H&BU requires maximally productive, is it assuming as of the effective date or is it intended to reflect a seller acting in their best interest when it may be to hold the property given the definition of market value etc? I'm simple and I guess I don't get that as an appraiser I dictate the market rather than reflect its market participants. People are such idiots. I'm glad I'm an appraiser and above the idiots out there buying and selling, lending or insuring real estate mortgages.

 

[Mr Rex]

You, sir, are a blowhard.

Be careful what you wish for--particularly when you are clueless in what you assert.

It was wise of you many years ago not to use your real name in your posts here. It gives you the protection that you need.

Blow hard? Ever catch the mystery man? Ever care to elaborate on your assertion on immediate? I guess I hit a nerve that you couldn't carry DW's or Santora's jock strap. I never implied that I could. You damn sure have implied that you are among the elite, while exhibiting why you are not. Blow on big man. I look forward to taking your USPAP update course. I'll sit in the front row. Are you going to pay my airfare when the sheet hits the fan and you have to eat crow?