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

[JSmith43]

OP: There were some classic threads on this topic. Rich Heyn opined in one of them. Apparently, he was delivered the opinion straight from Fannie Mae, but there were no stone tablets. Therefore, the rest of us have to patch together our game plan based upon the written evidence from the GSE's that require the 1004MC.

In my opinion, the 1004MC language trumps the language in the Neighborhood section that many of us view as conflicting, simply because the 1004MC is a more recently crafted document compared to the 03/'05 form set. Additionally, the 1004MC language is more explicit, but that is a tough call as well

It is a can of worms & each appraiser is forced to clarify how they handle things up front.

 

[Amy Perkins]

In a perfect world yes, but sometimes the neighborhood does not reflect it's comparable sales. This happens to me quite a bit because I will get a largest estate in the neighborhood, so I expand it to the other large estates or an area with more estates. I end up with more than one 1004MC in the addendum and explain what the actual neighborhood contains.

 

[OSU Beavers]

1004MC sales and listing = the comparable sales and listing at the top of page 2 not ALL the sales from page 1.

 

[Joe Flacco]

The whole point of the MC form is so that appraisers analyze market trends instead of checking the middle boxes in every report. There are many times when the price data would show increasing price in each measured period but when I look closer at the data comparing apples to apples prices are stable. Then I just explain so and check the stable box. Especially this year as distressed sales have dried up and more homes at the upper end of the price range have been moving it's pushed the median price higher. Just looking at the numbers and concluding a trend based on those numbers is dumb. We need to keep in mind that the whole point of the MC form is to analyze trends. Trend conclusions can be different from what the data in the form actually shows. It just needs to be explained. I think the MC form was a good idea.

 

[Rich Heyn]

OP: There were some classic threads on this topic. Rich Heyn opined in one of them. Apparently, he was delivered the opinion straight from Fannie Mae, but there were no stone tablets. Therefore, the rest of us have to patch together our game plan based upon the written evidence from the GSE's that require the 1004MC.

In my opinion, the 1004MC language trumps the language in the Neighborhood section that many of us view as conflicting, simply because the 1004MC is a more recently crafted document compared to the 03/'05 form set. Additionally, the 1004MC language is more explicit, but that is a tough call as well

It is a can of worms & each appraiser is forced to clarify how they handle things up front.

The stone tablets have subsequently been issued in the form of the most recent selling guide.

 

[hastalavista]

The stone tablets have subsequently been issued in the form of the most recent selling guide.

True.
And I, as one who argued with Rich on this (I should have known better!!! :laugh have had to change my ways.

 

[JSmith43]

https://www.fanniemae.com/content/guide/sel072914.pdf

Updated selling guide July 29/2014. I won't have time to dive into this today

It has been a split decision, depending upon the sources. FHA has a FAQ that says the Neighborhood section & 1004MC data don't necessarily have to match, for example.

I forgot to give D. Wiley credit as well. He was also given the whispered heads up regarding Fannie Mae's "true intentions" about this matter. I assume Rich H is right that there is clarity in the most recent guideline. But, I'll see for myself, eventually

 

[DWiley]

We have developed a very detailed 37 page guide to reporting market conditions. That document can be viewed at servicelinkuniversity.com. (Look under In Depth training).

The bottom line is that if the 1004MC has too little data for trend analysis, then the 1004MC has not been completed correctly. :new_llying:

The 1004MC instructions, printed right on the 1004MC, say that the data in the 1004MC MUST be used to support the trends reported in the neighborhood section.

The grid should be based solely on comparable properties in the subject's neighborhood. But the grid is just part of the form. If the grid does not have enough data for trend analysis, then more data must be added. What kind of data and how much? Data that supports the trends reported.

 

[Lee Lansford]

We have developed a very detailed 37 page guide to reporting market conditions. That document can be viewed at servicelinkuniversity.com. (Look under In Depth training).

The bottom line is that if the 1004MC has too little data for trend analysis, then the 1004MC has not been completed correctly. :new_llying:

The 1004MC instructions, printed right on the 1004MC, say that the data in the 1004MC MUST be used to support the trends reported in the neighborhood section.

The grid shodul be based solely on comparable properties in the subject's neighborhood. But the grid is just part of the form. If the grid does not have enough data for trend analysis, then more data must be added. What kind of data and how much? Data that supports the trends reported.

This is what I've been tryin' to tell 'em.



But, seriously.

 

[JSmith43]

Intended Use & Intended Users vs "May Relier's" complicates this for appraisers who don't want to mislead any likely reader of the report.

In Common Usage English, the 1004 Neighborhood Section does not imply that it is talking about Comparables when it asks for One Unit Housing Trends with respect to Property Values, Demand/Supply, & Marketing Time.

When it asks for One Unit Housing "Price" range data (low, high, predominate) & One Unit Housing age range data for the Neighborhood, if Kreskin were buying a home & reading the report, he would never guess that any of that data applied to comparable sales only.

Bottom line, the form designers don't want to take credit for the lack of coherence between the 03/05 form set & the 1004MC add on form. They'd rather wordsmith their way around it. Besides, that way it is easier to discredit appraisers along the way (bet that thought went through the legal minds involved).

So, as an appraiser, it is our job to reverse engineer this cluster flux as best we can. I know R H & DW are doing their diplomatic best to help us along in dealing with the reality we have to work with.

But, please step up & at least hint that this could be made much more clear to the troops in the field, simply by a form & guideline rewrite of these two sections. JMHO.