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

[Meandering]

Correct.

No doubt about it: appraisers must provide analysis.

But Lee,

What happens when your analysis is counter to the 1004MC?

If we are going to be held to time adjustments based on the 1004MC and not on our own analysis. what is going to happen when the 1004MC shows an increasing market and our analysis indicates the market is declining?

Sure we could say the reason the 1004MC shows an increase is because the two newest sales had in ground pools while the oldest sale does not have a pool, and we used raw, unadjusted sale prices on the 1004MC to show the market trend.

But how is none of this misleading?

And if everything on the 1004MC is a comp, I could grid them all. When adjusted, they might show a stable market, oh, but the rest of the market is surrounded by REOs and shorts and 80% all cash sales.

But hey, I'm going to say the market is increasing, because of the 1004MC and make time adjustments? And then narrating some thing will rectify the whole situation so it won't be misleading?

Oh I know, I'll just take back those time adjustments in the reconciliation, and reconcile to a lower price. Yup, that'll make the high heels happy.


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[Lee Lansford]

Joyce, appraisers are charged with analyzing the data before them (I know that you know this, but, perhaps, for others).

I can't say from here what is appropriate analysis for a particular situation, but, I do know that it is the responsibility of the appraiser to analyze and report.

Conclusions of an"overall trend" in the 1004MC can be via supplemental data and analysis (all of which the appraiser is obligated to communicate in some manner).

 

[Meandering]

Joyce, appraisers are charged with analyzing the data before them (I know that you know this, but, perhaps, for others).

I can't say from here what is appropriate analysis for a particular situation, but, I do know that it is the responsibility of the appraiser to analyze and report.

Conclusions of an"overall trend" in the 1004MC can be via supplemental data and analysis (all of which the appraiser is obligated to communicate in some manner).

I'm Marion,

I'm the cute one.

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[Peter LeQuire]

I'm Marion,

I'm the cute one.

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Cute One -

Reread Mr. Wiley's #89, particularly the last sentence.

IMO, few appraisers are going to admit to not knowing their market or its trends. But the truth behind that is that all of the form reports without some level of discussion about the information summarized in the boxes look alike, whether there's any analysis behind the checks or not. Rather than require appraisers who didn't provide some sort of summary of how the indicated trends were developed to do so before moving their loan packages along (which would bog down production and risk losing interest rate commitments, etc.), they're now requiring all provide an analysis which, in most cases, is of little usefulness. The (IMO mistaken) requirement that the neighborhood trends be (nominally) those of the properties populating the MC is now institutionalized and probably won't be changed.

The MC is populated with comparables. If there are too few of those to support conclusions about trends, information about non-"comparables" or "competitive" properties or properties from an expanded area are to be analyzed so that there can be support for the Page 1 neighborhood trends. It would be more straightforward - IMO - to have the neighborhood trends (properly researched and analyzed) reflect all properties in the neighborhood, and to have an analysis of the trends of comparable properties reported somewhere else (the MC addendum being more than adequate for that purpose).

And, I know that assignment specific requirements are thought to do away with any contention that the conflicting requirements of the URAR and the MC addendum, but that, IMO, a illogical: how can the characteristics of one part of something be considered reflective of the whole. But, again, I've been Borged - I will comply.

And perhaps someone with the secret decoder ring will point me to the information that would tell me, when there is not enough data to support comparables' trends, where I am supposed to report the data and analysis supporting my neighborhood trend conclusions - is it on the MC addendum itself, in the discussion of neighborhood market trends on the URAR (or one of its addenda).

 

[Joyce Potts]

Joyce, appraisers are charged with analyzing the data before them (I know that you know this, but, perhaps, for others).

I can't say from here what is appropriate analysis for a particular situation, but, I do know that it is the responsibility of the appraiser to analyze and report.

Conclusions of an"overall trend" in the 1004MC can be via supplemental data and analysis (all of which the appraiser is obligated to communicate in some manner).

Most appraisers are aware of how to do the 100MC and communicate, however, is not about knowing how, it's about when and should the data coincide with Page 1 of the URAR form and if not, what then.

As I've said before, I actually like the 1004MC IN MOST CASES, but for many properties, it simply will not work. As more and more cookie cutter properties are being valued using AVM's and BPO's, appraisers are getting a larger number of problematic assignments that are never going to fit into standard lender guidelines.

As to the question of should the 1004MC match Page 1 of the URAR, in some cases mine do, and in some cases mine don't. It depends on the assignment, my interpretation of what Page 1 asks for vs. the 1004MC and what I can do to explain why they don't always match.

This is another example like what's going on over on the Facebook Coalition thread -- everyone has a different interpretation including you Cert USPAP instructors. The underwriters are not consistent with their stips and understanding on their end either. There is simply a major lack of consistency and USPAP ambiguity that more often than not, leaves the appraiser's butt hanging.

It takes me three times as long to write a standard 1004 (lending use) report up as compared to 10 years ago AND USUALLY for less of a fee, with more than 50% of my time caveating and explaining these atypical properties and the analysis that doesn't meet strict lending guidelines and am still getting stipped to death in most cases.

Factor in that Florida is still #1 in foreclosures and talk to me about trying to trend the erratic, inconsistent and nonsensical market data.

 

[NCkicker]

PLEASE .... How does this show a trend?

6 sales, 3 sales and 4 sales...... yes.....I guess, we can make a claim from 13 sales. See it is increasing...... GOOD GRIEF..... DOM , 26, 24dom and 21 dom...... got to be declining. All based on 13 sale in a year! Wait, wait, 1 pending sale, what does that mean next month........ JUST MORE WILD swings based on a tiny number of sales.. Does it mean anything? Really? Truly? Then to be told all the numbers/stats/$ from the MC form MUST be used on page 1 section.

And when you say 5 of the sales are REO and short..... you are expected to make a comment when you use a comp that has a $SP more than 10% from your subject. Sorry it was 12% away...... What has this become?

 

[Meandering]

Cute One -And perhaps someone with the secret decoder ring will point me to the information that would tell me, when there is not enough data to support comparables' trends, where I am supposed to report the data and analysis supporting my neighborhood trend conclusions - is it on the MC addendum itself, in the discussion of neighborhood market trends on the URAR (or one of its addenda).

I know a guy who lost a leg in an industrial accident and still stood in the kitchen to cook,

He was well supported with one leg,

And while most people are supported by two legs,

Most chairs are supported by four legs,

yet some sitting stools are supported just fine on 3 legs, and some milking stools are holding the milker up with just one leg,

It takes at least 3 sales to support the sales comparison approach,

But apparently only one index to support the cost approach,

And as little as one or two rentals to support income, or s little as one or two sales of rentals from which to extract market derived GRMS.

Most statisticians say you need 30 data points to get a high confidence level. for trending.

But If I had 30 comps that sold in the past 3 months and 30 more that sold 6 months ago and 30 more that sold 9-12 months ago, I would not need an appraisal, the answer would be right there in your face.

But if my comps are supposed to come from my neighborhood, and my neighborhood is a PUD, with less than 6 comparable sales,

well by golly, you're getting those PUD sales and the trend is what ever the sales comparison approach shows it is.

The analysis of only comparable, that have not been adjusted to their differences in amenities (line item considerations), favorable financing and seller concessions is a non sequitur error in reasoning that the price differences are reflective of the time frame in which they sold. You can't have it both ways, price differences are reflective of time alone, and price differences are reflective of physical differences and favorable financing.

But just for craps and giggles, and considering the other comments made by this valuation visionary who listed to a Fannie rep and made this report,

That, little statement about, appraisers did not comment about indications that might indicate a declining market.............

Well, from the ivory tower, we look at the jobs report, the tight lending requirements, the whining banks and Realtors, how could you not find indications the market "might" be declining? Even if prices are going up in Texas, there are still indications the "market" might be declining.

If you all can not see this as a giant snow ball to discredit all appraisals in a few years.......

Well,

Jump right on that 1004MC band wagon.

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[residentialguy]

There is a simple reason, and it is certainly not stupid. It is all about credibility.

Typical federal protocol. Making the appraiser do something that will produce more crap. Sorry Danny, but you can't force credibility on an appraiser. They're trying to create Stepford Appraisers. They're either credible or they're not. Here's a novel idea...hire only credible appraisers and enforce action on appraiser's that are not. :icon_idea:

USPAP says that credibility is achieved via support by evidence and logic. Well, the 1004MC form should contain the evidence and logic that supports the trends that have been indicated in the neighborhood section.

The reason we now have the 1004MC is the fact that so many appraisers were just checking boxes without looking at any data or doing any analysis. As a result, they missed big market changes, or were very late to see (and report) them.

My position (as well as FHA's) on this creates GREATER credibility and not a misleading report with lesser credibility like FNMA's position. Not only are they getting the trend of the sub market, they are also getting the over trend of the surrounding housing and how it affects the subject.

 

[JSmith43]

Res, no one is likely to accuse you of just following orders.:icon_lol:

 

[Meandering]

And, look for "sufficient data to support a trend" where?

In the forest under a rock?

In town 20 miles away where bears typically don't disturb the garbage cans?

yeah okay.

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