Fannie Mae and "Multiple Parcels"

[Carnivore]

I have been here like many a long time. What I have Learned best at this forum is I am wrong sometimes, and sometimes I am right. Other times I am not sure...

I can easily fix when I am wrong, once I realize I am wrong. I also can strengthen my position just by reading and not commenting when I am not sure.

This site is way to valuable and important to inject personal feelings. We are human and because of that we do cross the line. I try not too... nothing good comes of it.

It almost impossible to claw back an offhanded comment, but it can be done. The best wau is to shut up and do more thinking than writing.

"If you kids don't settle down, i am going to come in there.. !!"

 

[Econobot]

Well, when faced with what amounts to an "unreasonable assignment condition" that is the very first of the possible solutions offered. Renegotiation of those assignment conditions would be another and I daresay that would probably work just fine for Fannie assignments.

I've never once had that fail in any of my assignments, but then again I work with all sorts of client types OTHER than Fannie.

BTW, there's no inherent reason for producing a separate report, so I don't know why anyone would leap to that as being the only way to express another value conclusion in this assignment.

Are you saying that (2) appraisals (land and SFR) would work for Fannie?? You can't be....they don't accept that method and it's exactly why they issued the guidance on "value in use". Turns out only JGrant was doing "value in use" so they figured they should try to encourage others to join in...haha jk, maybe...

 

[George Hatch]

I'm saying that a 1004-based report can include multiple value conclusions. I've done it before myself and I've seen a lot of other appraisers do it. Including recently.

What Fannie accepts is up to Fannie, but I've never heard of them rejecting an appraisal report for having too much information in it.

 

[Carnivore]

I'm saying that a 1004-based report can include multiple value conclusions. I've done it before myself and I've seen a lot of other appraisers do it. Including recently.

What Fannie accepts is up to Fannie, but I've never heard of them rejecting an appraisal report for having too much information in it.

Correct... if everyone gives some thought to it, we produce a Value opinion of the subject site in a 1004. Also in AS-Is and AS-Repaired assignments we produce two Value opinions along with the Site Value.

 

[CANative]

Ok, so you're saying cancel the assignment and only accept if you can do a land appraisal and SFR appraisal?

Yes. Better to lose a fee than get a demerit from the State Appraiser Agency.

 

[Andrei Fin]

So if you can just throw in multiple subject properties and multiple values that the lender did not request, where does it say that you cannot also include multiple definitions that the lender did request?

MV of (A+B) = MV of A + value in use of B

Value in use: (1) The value the real estate contributes to the enterprise of which it is a part. The Appraisal of Real Estate, 14th ed. Chicago: Appraisal Institute, 2013. pg 62.

 

[J Grant]

So if you can just throw in multiple subject properties and multiple values where does it say that you cannot also include multiple definitions at the lender's request?

MV of (A+B) = MV of A + value in use of B

Value in use: (1) The value the real estate contributes to the enterprise of which it is a part. The Appraisal of Real Estate, 14th ed. Chicago: Appraisal Institute, 2013. pg 62.

That is what fannie is saying as to how it could be done.

 

[CANative]

Excess and Surplus Land

At times, an appraiser is often called on to appraise improved properties that have an above-average amount of land. These assignments may either be for single-family resdidential or commercial or industrial parcels. Two questions arise in such assignments. What is excess land and how should it be appraised? Excess land is land that is not needed to support the use of existing or probable future improvements. There are two variations of excess land. Some housing agencies and residential mortgage lenders will not lend on an additional lot or acreage that is judged to be beyond the needs of a typical homeowner (or common and customary for a particular area.) That is, if a half-acre lot is typical for homes of a particular price and in a suburban neighborhood, then an extra lot would be excluded from the transaction and the borrower would have to acquire it with cash. The appraiser would only appraise the underlying home-site and building. However, if it were necessary to appraise the additional lot or land, it could be done readily and without any discount in unit value because it has value as a separate economic unit.

James S. Boykin, PhD, MAI, SREA, CRE - Land Valuation - AI

Excess land is not a single economic unit. By definition.

 

[Mr Rex]

Obviously there have never ever been sales of properties with 2 contiguous lots with different H&BU in the strictest of USPAP edicts, so it is impossible to opine a value of such an alien transaction. Fannie Mae, as the largest source of mortgage funds in our galaxy has obviously lost their freaking minds. WTF were they thinking? I'm nose deep and bloody n the latest USPAP and I don't think an Appraiser has a chance to dodge the USPAP police on this one. Check the f'ing no H&BU checkbox on the form, reiterate the latest update on the issue from Fannie, and explain why the H&BU is checked no. Rocket surgery.

 

[George Hatch]

So if you can just throw in multiple subject properties and multiple values that the lender did not request, where does it say that you cannot also include multiple definitions that the lender did request?

MV of (A+B) = MV of A + value in use of B

Value in use: (1) The value the real estate contributes to the enterprise of which it is a part. The Appraisal of Real Estate, 14th ed. Chicago: Appraisal Institute, 2013. pg 62.

You can, so long as you call a value in use by than nomenclature.

One of the requirements in USPAP is to cite both the definition of value being used and its source:



Fannie's difficulty is that (last time i looked) they can't base loan decisions on Value-in Use. But that's their problem, not ours'.