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

[djd09]

USPAP is POORLY written.

Well, that issue seems to be a two year reoccurring theme for obvious reasons.

Anyways, where is fannie's update? Luckily i was not holding my breath for it.

 

[George Hatch]

Well, you have one side of the issue here. And, BTW, I agree that HBU isn't optional. But there are interpretations, that give effectively give more weight to the SOW. You just need to google.

And this gets back to the more fundamental issue. USPAP is POORLY written. It really doesn't know how to deal with these kinds of issues in a consistent and non-contradictory way. They get these different components into the USPAP, which are quite capable of contradicting each other - but don't handle the possible eruption of contradictions. What if? What if the assignment conditions ask for the HBU to be sidestepped with respect to certain issues, e.g. an excess parcel with a different HBU than the main parcel? A simple statement that the SOW can't do this or that would be fine, - provided it is general enough to encompass all situations.

Good gravy. How many times do I have to tell you to simply read the text for what it says and refrain from loading your own misconceptions into the material? "The Client" is never the sole measure of what is/isn't acceptable. The client isn't even mentioned in the 2-part test for the acceptable SOW decision.





This is the material in black and white. You might disagree with these requirements but you don't have any excuse for "not understanding" what they are or for continually mischaracterizing their meaning the way you have been. So stop being dumb about it.

 

[George Hatch]

Well, that issue seems to be a two year reoccurring theme for obvious reasons.

Anyways, where is fannie's update? Luckily i was not holding my breath for it.

A couple weeks back I had heard they were scheduled to drop their clarification by the end of this week. I dunno if that's still the plan or not.

 

[Lee Lansford]

Well, that issue seems to be a two year reoccurring theme for obvious reasons.

Anyways, where is fannie's update? Luckily i was not holding my breath for it.
[/QUO

A couple weeks back I had heard they were scheduled to drop their clarification by the end of this week. I dunno if that's still the plan or not.

Soon.

Not certain how much "clarity" there will be, but, we shall see.

 

[andrew81]

any one read the march update?
https://singlefamily.fanniemae.com/media/9071/display

 

[George Hatch]

As expected. Fannie does not have the means to tell appraisers to skip the HBU analysis or to mischaracterize a Use Value as MV. The fundamentals of appraising still apply, even for Fannie assignments

 

[andrew81]

then on the next page they say to ignore highest and best use:

Applying the legal HBU test to multiple parcels,
the Fannie Mae Selling Guide requires that “[t]he
mortgage must be a valid first lien that covers each
parcel.” (See B2-3-04, Special Property Eligibility
Conditions.) Thus, excess land (capable of a separate
use — i.e., subdivided and marketed as individual
parcels) is not a possible outcome of the HBU
analysis because the parcels cannot be separated
without mortgagee consent.


this is also incorrect. the appraisal assumes the property rights are fee simple. The Appraisal of Real Estate 13th Edition: Fee Simple- absolute ownership unencumbered by any other interest or estate, subject only to the limitations imposed by the governmental powers of taxation, eminent domain, police power, and escheat.

The fee simple interest is subject only to the limitations imposed by the four powers of government. FNMA is not a 5th power of government.

 

[Terrel L. Shields]

FNMA is not a 5th power of government.

Are you sure?

 

[Lee Lansford]

any one read the march update?
https://singlefamily.fanniemae.com/media/9071/display

I read it...and I'll re-read when I have a moment to spare.

In brief, I think that the writing is 'fuzzy' at best and not something that we would expect to find in a "Fundamentals of Real Estate Appraisal" text .

 

[J Grant]

A nothing burger from them - am sure they are far more concerned now with other matters as we all are - still the fannie response is so inane hardly anything to debate!