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Considering filing complaint for lack of market conditions adjustment on stale comps

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Sadie said:
Per Fannie Mae guidance, the 1004MC and the Neighborhood section of the 1004 contains different data sets. 1004MC is your pool of competing properties while the Neighborhood section is the entire neighborhood, not just competing properties. So you can have a declining market indicated on your 1004MC and an increasing one for your neighborhood in general. Any discrepancies need to be explained in the addendum so the users can understand your reasoning behind adjustments or the lack of adjustments.
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I think you are wrong on this one.

 
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Sadie said:
Per Fannie Mae guidance, the 1004MC and the Neighborhood section of the 1004 contains different data sets. 1004MC is your pool of competing properties while the Neighborhood section is the entire neighborhood, not just competing properties. So you can have a declining market indicated on your 1004MC and an increasing one for your neighborhood in general. Any discrepancies need to be explained in the addendum so the users can understand your reasoning behind adjustments or the lack of adjustments.
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This claim is not correct

Read the directions printed on the 1004MC. They clearly say that the 1004MC must be the basis for the trends reported on page 1.
 
Sadie said:
Per Fannie Mae guidance, the 1004MC and the Neighborhood section of the 1004 contains different data sets. 1004MC is your pool of competing properties while the Neighborhood section is the entire neighborhood, not just competing properties. So you can have a declining market indicated on your 1004MC and an increasing one for your neighborhood in general. Any discrepancies need to be explained in the addendum so the users can understand your reasoning behind adjustments or the lack of adjustments.
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Tom D said:
glen, i agree. when i did reviews for option 1 they would cross out the appraisers name. after a while i could recognize the same appraiser doing the same thing all the time. it was usually the same group crossing my path. why would a bad appraiser only do it once badly, it's the nature of that crooked appraiser. i don't know if anything happened to them, but option 1 is gone.
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Jim Bartley said:
The problem in lot of areas is a lack of recent sales. I've never seen inventory this low. I'm working on one now with contract dates of 11/20, 9/20 and 6/20. I'm making across the board market adjustments based on two pending sales. I'm also coming in $5000 (+3%) over the highest closed sale, but it's bracketed by the pending's (one of which has since closed).
A lot of appraiser's push back on that. They think the value HAS to be based solely on closed sales. But that ignores how the market really works. We just sold our house and when we priced it we were looking at the current competition, not what sold x months ago.
I think your appraiser just didn't know how to articulate what he was seeing, so he just ignored it.
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La, La, La, La : )
 
glenn walker said:
I think intentionally checking the wrong box on page one that is different than what the appraisers analysis and data presents is not only misleading but also a USPAP violation . Proper methodology is to produce a credible report. The appraiser is to check the box on Page One that is closest to what his/her data and analysis best represents and then attach the addenda supporting that trend. Not play silly games with the Client and Intended users because the appraiser thinks reviewers are stupid.

In a review we were not there to nit pick- nuances or even possible differences of opinions. But if I was delivered a report that had been checked as "Increasing" but then the appeasers data and his own 1004-MC showed Stable or decreasing-- initially I would assume he had made a mistake on page one and we would have asked him to re-check the box that best matches his analysis This is also a time waster because the Underwriter also has to complete a tech review, so now you just wasted her time too , because when she discoverers that page one is conflicting with your 1004-MC or analysis She would send it to review for us to find out what the discrepancy was and to get it corrected. If you respnded that you do that intentionally in your reports, I would have recommned you be removed from the fee panel because if you will intentionally mislead about market trend then what else will you do and we were not there to be baby sitters.
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That is why I think Fannie removed the 1004MC. Appraisers not doing it right or because too many times it produces poor and contradictory results.

I am just doing what the instructions tells me to do when the results of the 1004MC is not reliable. Maybe other appraisers that are "playing the game" or are "inputting the data to make the UW and reviewers happy", which as you reported could be the case...

Lets be clear on one thing. One page 1 of the URAR I check "increasing" and on the 1004MC I also check "increasing", even though the 1004MC may show a stable or declining market. I then report below why the 1004MC is not accurate and provide additional data and analysis. Other appraisers just play the game and move on, that is why their reports gets by the review appraisers and UW. Nice and clean.

4. What should the appraiser do if there is not enough data to present a meaningful analysis? In those situations, the appraiser must complete the form with the information he or she has for the defined neighborhood/area—the lack of data may speak to what is occurring in that area. Additional analysis can be addressed in the summary/conclusion section of the form on data in nearby areas for competitive properties. In any event, the appraiser must provide support for his or her conclusions regarding housing trends as noted in the Neighborhood section of the appraisal report.
 
NC Appraising said:
I think you are wrong on this one.

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https://www.lowman-co.com/documents/FNMA March 2009.pdf
http://www.workingre.com/wp-content/uploads/2013/08/Fannie-Mae-0830-Announcement.pdf

usually the information is the same, but when it is not, or there is insufficient data, you don't blindly follow what is on the 1004MC.

You have interpretations, here it is from the horses mouth. Sorry.
 
NC Appraising said:
That is why I think Fannie removed the 1004MC. Appraisers not doing it right or because too many times it produces poor and contradictory results.

I am just doing what the instructions tells me to do when the results of the 1004MC is not reliable. Maybe other appraisers that are "playing the game" or are "inputting the data to make the UW and reviewers happy", which as you reported could be the case...

Lets be clear on one thing. One page 1 of the URAR I check "increasing" and on the 1004MC I also check "increasing", even though the 1004MC may show a stable or declining market. I then report below why the 1004MC is not accurate and provide additional data and analysis. Other appraisers just play the game and move on, that is why their reports gets by the review appraisers and UW. Nice and clean.

4. What should the appraiser do if there is not enough data to present a meaningful analysis? In those situations, the appraiser must complete the form with the information he or she has for the defined neighborhood/area—the lack of data may speak to what is occurring in that area. Additional analysis can be addressed in the summary/conclusion section of the form on data in nearby areas for competitive properties. In any event, the appraiser must provide support for his or her conclusions regarding housing trends as noted in the Neighborhood section of the appraisal report.
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Well Fannie may have removed it but FHA and many of the conventional lenders investors still require it. No matter what it has to be done one way or the other and I recommend that residential appraisers to still use it if they can produce credible results. If they cannot produce a credible trend there going to have to explain it anyway and many after Fannies announcement immediately went back to their same old bad habits. I have a feeling 2022 is going to be the year of the Big-Bang and those trends and adjustments better be real good. What we need out here in Shaky City is An-optional ( Irrational Exuberance & Out of Equilibrium Box )
 
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