Does the 1004MC equal the Neighborhood One-Unit Housing trends on page 1

[Lee Lansford]

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Since the subject is influenced by it's surroundings, it only makes perfect sense that the appraiser take a look at the whole "neighborhood" as page 1 indicates.

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That's not what Fannie is requiring in the relationship (direct, that is) between what is reported on page 1 of the Fannie form and the 1004MC.

 

[J Grant]

I'll have to review the Fannie (guideline, or requirement?) when have time I believe it is posted on this thread on one of the posts? (from D Wiley)?

It's becoming a minefield for appraisers if Fannie has specific requirements that clash with client engagement letter requirements that clash with USPAP obligation to provide credible and not misleading results. Sometimes all three sets of expectations clash and an appraiser can not meet them all simultaneously .

Before, nobody was paying attention. Now in an over correction everybody is participating in appraisal development, from Fannnie to client to staff reviewer at AMC to RE agent in an ROV to the UW etc. The appraiser control of report is tenuous and it is becoming almost impossible to make a rational response that can satisfy competing and at times contradictory expectations.

 

[Scott FL]

HUD seems to better understand comparable vs neighborhood vs market.

One wonders if Freddie Mac has such a difficult time distinguishing between a comparable, neighborhood and market.

 

[Meandering]

When completing the One-Unit Housing Trends portion of the Neighborhood section of the appraisal report forms, the trends must be reflective of those properties deemed to be competitive to the property being appraised. If the neighborhood contains properties that are truly competitive (that is, market participants make no distinction between the properties), then all the properties within the neighborhood would be reflected in the One-Unit Housing Trends section. However, when a segmented or bifurcated market is present, the One-Unit Housing Trends portion must reflect those properties from the same segment of the market as the property being appraised. This ensures that the analysis being performed is based on competitive properties. For example, if the neighborhood contains a mix of property types not considered competitive by market participants, then a segmented or bifurcated market is present. Additionally, the conclusions reported in this portion of the appraisal will be supported by the analysis contained in the Market Conditions Addendum to the Appraisal Report (Form 1004MC). The appraiser should also provide commentary on the other segment(s) of the neighborhood when segmentation is present.

https://www.fanniemae.com/content/guide/selling/b4/1.3/03.html

Thanks Rich,

But could you also address that REO question?

If none of the comparables are REO properties, do I mark No on the forum and ignore the carnage in the neighborhood?

And if none of the comparables or one comparable had a seller's concessions, do I mark stable for seller concessions and ignore other sales in the neighborhood?

It would greatly cut down on my research time if the answer to these questions are yes,

Besides, why would REOs be competing as comparables with non-REOs??

They might require line item adjustments of 10% or more!

Please translate the Fannie speak so we can build reports that gets the GSE and the lenders to their final goals.


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[Lee Lansford]

I think that the whole form is a bit misleading. If my supply is at 1 month, then two months, then three months, it is not necessarily an increasing supply trend. Anything less than three months is a low supply. The median price is almost always skewed due to views, I have to explain why the boxes checked might not be reliable results so many times in the written portion of the form. Say the supply went from 40 months to 30 months is this decreasing, no it is an oversupply for that market. I also struggle with the whole stable box without any unstable box.

Correct.

No doubt about it: appraisers must provide analysis.

 

[JSmith43]

For those of you that are still uncomfortable with this situation, be sure to qualify your report appropriately. How about adding Ich habe nur Befehle befolgt?:laugh:

I prefer to do my own "conditioning", but realize that isn't always an option for an appraiser.

 

[J Grant]

Originally Posted by Rich Heyn View Post
When completing the One-Unit Housing Trends portion of the Neighborhood section of the appraisal report forms, the trends must be reflective of those properties deemed to be competitive to the property being appraised. If the neighborhood contains properties that are truly competitive (that is, market participants make no distinction between the properties), then all the properties within the neighborhood would be reflected in the One-Unit Housing Trends section. However, when a segmented or bifurcated market is present, the One-Unit Housing Trends portion must reflect those properties from the same segment of the market as the property being appraised. This ensures that the analysis being performed is based on competitive properties. For example, if the neighborhood contains a mix of property types not considered competitive by market participants, then a segmented or bifurcated market is present. Additionally, the conclusions reported in this portion of the appraisal will be supported by the analysis contained in the Market Conditions Addendum to the Appraisal Report (Form 1004MC). The appraiser should also provide commentary on the other segment(s) of the neighborhood when segmentation is present.

https://www.fanniemae.com/content/gu...b4/1.3/03.html

This actually makes sense and DOES NOT say that MC form results match the trends on neighborhood section page one.

 

[Lee Lansford]

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It's becoming a minefield for appraisers if Fannie has specific requirements that clash with client engagement letter requirements that clash with USPAP obligation to provide credible and not misleading results. Sometimes all three sets of expectations clash and an appraiser can not meet them all simultaneously .

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Do you have an example or two?

I ask because I do have interest in what might be conflicts.

 

[J Grant]

The appraiser should also provide commentary on the other segment(s) of the neighborhood when segmentation is present.

Marion, that answers your question about REO

 

[J Grant]

Additionally, the conclusions reported in this portion of the appraisal will be supported by the analysis contained in the Market Conditions Addendum

This is a different directive than having results match on MC form and page one. however Fannie directive to narrow p 1 trends down to more competing properties to subject indicates a closer alignment, while MC form focuses on those fewer properties that are truly comps for subject and thus used in report or close to being used and at least considered.

I have always tailored my trends in neighborhood section to be that more reflective of subject competition while also describing property differences when non conformity or mix of property types is present.