Does ANSI apply?

[Terrel L. Shields]

At least one AMC that I'm familiar with includes the requirement that the report state that ANSI was used... in nearly every resdential appraisal request.

And i am telling you that AMCs and secondary market does not apply any standards to non-conforming conventional loans which make up approximately 50% of all residential loans. Those loans are made by in-house lenders, small banks, and non-governmental lenders. FDIC does not require secondary market standards. I do not have a bank lender that does secondary market but much of their loans are for single family homes, small residential farms, small duplex-fourplex properties, in addition to commercial and land appraisals.

That is above and beyond the simple fact that no one, and I mean no one, except secondary market uses ANSI standards by fiat. Architects do not. Engineers do not. Builders do not. Assessors do not. Realtors do not. So, if we are supposed to rely upon "market data" where is the ANSI market data? Only in our own measurements. Does anyone at FNMA share the ANSI measurements of a dwelling you use for comps? They certainly could have a database of same, couldn't they? And so, we are mixing measurement standards when you try to apply ANSI to the dwelling we are appraising and our comparables are not ANSI measurements. They are the ordinary methods others use. So, we are mixing oranges to apples and calling them peachy. And the differences are not remarkable, so what is the point of it? It certainly is not "uniformity", is it?

Further, since the average appraiser (like Ferd) seems to mold the standard every which way, then it is not even internally consistent. How many threads are about wanting to call a finished walk out basement "GLA"? How many threads are about the confusion of measuring short attic spaces and how to make adjustments. No one is going to dictate to Realtors that they have to measure and measure to ANSI standards. I don't know an agent who actually measures their listings. I see agents who add the basement into the GLA to get the total heated sq. ft. Well, technically that does meet the heated SF standard even if it varies from the assessor and appraiser's measurements. I've seen sunrooms added into the GLA, enclosed porches, etc. I would aver half the houses built in the 1930s here were updated by enclosing either the front or the back porch and now the assessor, the Realtor and the appraisers will call them all "GLA" despite the one or two steps down to that level on many of them. And, many have separate heat and/or air because they were not designed into the original building.

Finally, the simple fact is that a house is an aggregation of different functioning rooms. Some rooms were more expensive to build (like the kitchen and bathrooms), and some are just space holders. Yet we persist in a system of trying to "adjust" against somewhat dissimilar comparables with somewhat different components. Keep it simple. Something impossible for ANSI.

 

[sputnam]

And i am telling you that AMCs and secondary market does not apply any standards to non-conforming conventional loans which make up approximately 50% of all residential loans. Those loans are made by in-house lenders, small banks, and non-governmental lenders. FDIC does not require secondary market standards. I do not have a bank lender that does secondary market but much of their loans are for single family homes, small residential farms, small duplex-fourplex properties, in addition to commercial and land appraisals.

That is above and beyond the simple fact that no one, and I mean no one, except secondary market uses ANSI standards by fiat. Architects do not. Engineers do not. Builders do not. Assessors do not. Realtors do not. So, if we are supposed to rely upon "market data" where is the ANSI market data? Only in our own measurements. Does anyone at FNMA share the ANSI measurements of a dwelling you use for comps? They certainly could have a database of same, couldn't they? And so, we are mixing measurement standards when you try to apply ANSI to the dwelling we are appraising and our comparables are not ANSI measurements. They are the ordinary methods others use. So, we are mixing oranges to apples and calling them peachy. And the differences are not remarkable, so what is the point of it? It certainly is not "uniformity", is it?

Further, since the average appraiser (like Ferd) seems to mold the standard every which way, then it is not even internally consistent. How many threads are about wanting to call a finished walk out basement "GLA"? How many threads are about the confusion of measuring short attic spaces and how to make adjustments. No one is going to dictate to Realtors that they have to measure and measure to ANSI standards. I don't know an agent who actually measures their listings. I see agents who add the basement into the GLA to get the total heated sq. ft. Well, technically that does meet the heated SF standard even if it varies from the assessor and appraiser's measurements. I've seen sunrooms added into the GLA, enclosed porches, etc. I would aver half the houses built in the 1930s here were updated by enclosing either the front or the back porch and now the assessor, the Realtor and the appraisers will call them all "GLA" despite the one or two steps down to that level on many of them. And, many have separate heat and/or air because they were not designed into the original building.

Finally, the simple fact is that a house is an aggregation of different functioning rooms. Some rooms were more expensive to build (like the kitchen and bathrooms), and some are just space holders. Yet we persist in a system of trying to "adjust" against somewhat dissimilar comparables with somewhat different components. Keep it simple. Something impossible for ANSI.

You are simply wrong. ANSI is required by many AMCs simply because it's easier to require it than to try to keep track of when it's not required. No one, to the best of my knowledge, prohibits the use of ANSI. Even when it's not required by the AMCs Client, it's acceptable.

 

[J Grant]

And i am telling you that AMCs and secondary market does not apply any standards to non-conforming conventional loans which make up approximately 50% of all residential loans. Those loans are made by in-house lenders, small banks, and non-governmental lenders. FDIC does not require secondary market standards. I do not have a bank lender that does secondary market but much of their loans are for single family homes, small residential farms, small duplex-fourplex properties, in addition to commercial and land appraisals.

That is above and beyond the simple fact that no one, and I mean no one, except secondary market uses ANSI standards by fiat. Architects do not. Engineers do not. Builders do not. Assessors do not. Realtors do not. So, if we are supposed to rely upon "market data" where is the ANSI market data? Only in our own measurements. Does anyone at FNMA share the ANSI measurements of a dwelling you use for comps? They certainly could have a database of same, couldn't they? And so, we are mixing measurement standards when you try to apply ANSI to the dwelling we are appraising and our comparables are not ANSI measurements. They are the ordinary methods others use. So, we are mixing oranges to apples and calling them peachy. And the differences are not remarkable, so what is the point of it? It certainly is not "uniformity", is it?

Further, since the average appraiser (like Ferd) seems to mold the standard every which way, then it is not even internally consistent. How many threads are about wanting to call a finished walk out basement "GLA"? How many threads are about the confusion of measuring short attic spaces and how to make adjustments. No one is going to dictate to Realtors that they have to measure and measure to ANSI standards. I don't know an agent who actually measures their listings. I see agents who add the basement into the GLA to get the total heated sq. ft. Well, technically that does meet the heated SF standard even if it varies from the assessor and appraiser's measurements. I've seen sunrooms added into the GLA, enclosed porches, etc. I would aver half the houses built in the 1930s here were updated by enclosing either the front or the back porch and now the assessor, the Realtor and the appraisers will call them all "GLA" despite the one or two steps down to that level on many of them. And, many have separate heat and/or air because they were not designed into the original building.

Finally, the simple fact is that a house is an aggregation of different functioning rooms. Some rooms were more expensive to build (like the kitchen and bathrooms), and some are just space holders. Yet we persist in a system of trying to "adjust" against somewhat dissimilar comparables with somewhat different components. Keep it simple. Something impossible for ANSI.

I keep hearing about all this big market of non fannie//freddie backed loans, yet I have never met a single person who actually has a loan like that. And neither does anybody else I know. I highly doubt 50% of the res lending market is non-FFbecause if so, where are the ads for these programs, and why aren't they seen more often?

There are private lending terms for short-term mortgages, mostly used by flippers or people with very poor credit/vastly over-extended, and some private wealth financing on the high $ side, but where are all the et of the programs in this mystery giant market of res lending that most never use in their lifetime?

 

[BRCJR]

I keep hearing about all this big market of non fannie//freddie backed loans, yet I have never met a single person who actually has a loan like that. And neither does anybody else I know. I highly doubt 50% of the res lending market is non-FFbecause if so, where are the ads for these programs, and why aren't they seen more often?

There are private lending terms for short-term mortgages, mostly used by flippers or people with very poor credit/vastly over-extended, and some private wealth financing on the high $ side, but where are all the et of the programs in this mystery giant market of res lending that most never use in their lifetime?

50-50 is off a bit. It is more like 65 (F/F) - 35 (in-house). You should get out more or find more honest associates. Someone is not telling you the truth.

 

[Terrel L. Shields]

highly doubt 50% of the res lending market is non-FFbecause

70% of CONVENTIONAL conforming loans are FNMA or Freddy... A conventional loan is offered by a bank. Non-bank lenders are not conventional.

30% of conventional loans are FHA, VA or non-conforming such as that 5 year ARM you might get. And Real estate is put up as collateral in a lot of properties that are not residential loans per se. Commercial loans, land loans, construction loans, and a lot of other loans are not handled as conventional, conforming or non-conforming loans. I think Jumbo loans are not conforming conventional loans.

Rocket mortgage does some lending that is non-conforming (FHA, VA, Jumbo loans are ) Owner financing all or part is also considered a non-conforming loan. A hard-money loan is offered by individuals or private companies who accepts property as collateral on the loan. Construction loans are generally not conventional around here. Bridge loans are also made when someone buys a home and is waiting for their own property to sell. A regulated bank holds 10% of the value of real estate in reserve but if they don't appraise it or the loan is larger than the value of the property, they are required to have 100% reserves. (@BRCJR might have a different perspective on that but that was true around here for a long time.)

Interest-only mortgage: With an interest-only mortgage, you make interest-only payments on the loan for a set period of time. I believe I sourced the 50% from an FDIC link which included all property loans - commercial, residential, land, farm, anything backed by property whether short term or long.

We had very few FNMA loans in NW Arkansas when I started. And, the Cherokee Nation financed a lot of new homes in the 1970s for tribal members across several counties. Most non-conforming loans here were FHA, VA, or were shorter term - typically 10-15 years on a farm, 15-20 on a house. I've never had a 30-year loan, always 10 or 15 years. We had some FmHA loans, but many banks today do not access the secondary market. These are typically small community banks. I have worked for at least 5 such community banks who had no loan originators for secondary market. I still have one such lender- which is basically the only bank client I am willing to work with. They are lending their own money. Also, in this area, between Tysons and Walmart, there were a lot of banks with a lot of money who were happy to lend it and didn't need brokered money nor did it need secondary market. They were so awash in cash they were placing it with investment banks like Stephens Inc. who in turn, had helped finance Walmart's expansion. Alice Walton made a ton of money managing that kind of cash. She formed the Llama Corp as CEO and investment bank.