Fannie Mae Annoucement 02-02

[Robert Muir]

I got a letter from a friendly loan broker that I have done a bit of work for. He is one of those that understand the appraisal process and is thankful for it. Anyway the letter he sent was the new fannie mae announcement 02-02, dated 01/29/02, Amends These Guides: Selling. The letter covers six areas:
· managing the property valuation and appraisal review process,
· performing appraisals on properties in market areas experiencing
significant fluctuations in property values,
· appraising factory-built housing (including manufactured homes,
modular homes, and other types of prefabricated housing),
· updating an appraisal report, and
· adding, modifying, or deleting limiting conditions on an appraisal
report
I found the web copy at: http://adfweb1.adfinet.com/ you have to log in, but you can get some good info on this site.
I have two major concerns of this announcement (lots of little ones too), one is the fact that now fannie mae says that there has to be at least 2 similar comparables on manufactured type housing or they will not buy the loan. The communities I cover have from 300 people up to 9,000 people. It is my opinion that this will just about kill the rural market for manufactured homes in some of these areas. My other concern is that will this bleed over into other types of homes, such as log homes, A-Frames, 2 Story homes, etc. Yes, some of you have plenty of comparables to choose from, but some of my towns only have 2 sales a year. I have learned to appraise by what is not there. My dad told me, “Your not an appraiser until you do an appraisal with only two local comps and that are not comparable and you still get the deal closed.” I miss him, appraised since 1978, gone in 94 with the big “C”.
The one good thing about the manufactured section is that the appraiser cannot use vacant land sales and dealer sales together as a comparables.
The other main issue is that fannie mae will not accept any other type of certifications or limiting conditions besides their own. The following is a extract from the announcement:
“Although we permit an appraiser to add some certifications to our appraisal report forms, we will not purchase or securitize a mortgage for which the appraiser has added, modified, or deleted a limiting condition on the appraisal report. The lender must review the appraisal report to verify that no additional limiting conditions have been added and that none of the standard limiting conditions has been modified or deleted.”
There is some other good stuff about lender pressure, but seems very vague. They are going to take the word of the LO that no pressure was given to the appraiser. Isn’t that where we are at now??? 8O 8O

Bob

 

[Residential Appraisal Ser]

In some areas the FM 20-02 has some good sections in it. We have been after and spoken to Fannie about leveling the playing field for apprasiers. they have promised to do this. This letter is their results. So much for fairness. They say that they will come down on lenders. It looks as if their wipping person of choice is still the appraiser.

Fannie expects 90% of their valuations to be automated. We object to that and can't figure why they are making a big thing about going after appraisers other then an excuse to use automated values, by saying that appraisers are not any better then automated values.

Fannie and Fredie play good guy, bad guy so I would look for the steel toes to kick us from the Fredie side.

We are asking congress, why the Maes have no accounability, and are getting interest in that question.

William Sentner
President
American Guild of Appraisers OPEIU AFL-CIO

 

[Leon Stewart]

Bill:

I made a similar statement on this Forum a few weeks ago about FNMA playing Stupid, or thinking that the Appraiser is Stupid. They have already started the wheels turning on their "$ 50 no Appraisal" System, and they are making these unrelated statements about the same Appraisal Reports they are in the process of eliminating.

leart3

 

[The Bob]

Maybe FNMA just wants to "cherry pick" the market. Why bother buying loans on doublewides in the sticks? If the report needs added limiting conditions, then maybe its too risky. If you think about it, this makes perfect sence, at least from their point of view.

 

[Joe Birrell (NY)]

Fannie is just another "Enron" . They have been "cooking the books" with gimmicks way before Enron ever thought about. Since FIRREA and the AF they are one of the many foxes guarding the hen house. Eventually (I hope), it will blow up in their faces.

 

[jtrotta]

Bill makes a good point, and due to time, i haven't read it yet, but have any explanations been provided as to how we determine if the comps are "Factory Built" 8O

In my area, it's difficult to determine that "fact" and I generally only break out my "superman cape" once a year, so that I can see thru walls and roof area's :? we get arrested up here for peeping into private residences 8) note these gogles assist in the exray vision needed, Wayne I appologize, I know I wasn't suppose to tell