FNMA September revised FAQs

[hastalavista]

That's funny because the FHA wants page 1 to reflect the entire neighborhood.

The FHA process makes more sense to me!
But, the GSEs (in their finite wisdom) have concluded that:
a. rather than having the neighborhood section one page 1 represent the geographic market area, and then have the 1004MC represent the subject's specific submarket, thus presenting a comprehensive picture of the market's dynamic including any segmentation of the sub-property types within the SFR (or, whatever the subject is) classification, it would prefer
b. Page 1 to duplicate what exists on the 1004MC (and, is also displayed on the top of page 2 in terms of low-high range) and then require the appraiser to provide another analysis if segmentation is present.

I mean, why not have an additional, supplemental analysis rather use the form as FHA does, which provides the same picture without the extra step (and without the needless duplication)?

m2:

 

[Mr Rex]

That's funny because the FHA wants page 1 to reflect the entire neighborhood.

Not necessarily the "Neighborhood" but the "Macro market".



003 Should data on the 1004MC mirror that in the neighborhood section of
the appraisal report?
Not necessarily, the information on the 1004 MC relates to properties that are
comparable to the subject property and which a buyer may select as a
competitive property. This reflects the subject’s micro market. The
information in the neighborhood section is broader and encompasses market
activity in the subject’s macro market.

 

[VolcanoLvr]

A comment I wrote to another appraiser in my region this morning:

Quite frankly, the entire ‘form report’ methodology should be completely re-designed………..but the GSE’s are so entrenched with the UAD now that they can’t seem to figure out that the “hands,” and thus many appraisers, are totally confused.

The 'hands' comment refers to the classic "left hand, right hand" issue of contradiction.

 

[PhillyApp]

Hands up how many of you have been doing the 1004MC or the 1004 Neighborhood section incorrectly???

 

[444nutman]

Hands up how many of you have been doing the 1004MC or the 1004 Neighborhood section incorrectly???

Me.
Page 1 was the entire market and the MC form is the competing market. Then why did Fannie Mae issue at the beginning(when MC form released) of the MC form that if page 1 differed from the MC form an explanation is warranted. Basically the MC form is no longer needed since it already on top of page 2 and page 1.

To me, it give less information, I guess it was confusing the data scrubbers.

 

[PhillyApp]

Me too, I was waiting fro someone else to step forward...Like being on a firing line

 

[RSW]

Not necessarily the "Neighborhood" but the "Macro market".



003 Should data on the 1004MC mirror that in the neighborhood section of
the appraisal report?
Not necessarily, the information on the 1004 MC relates to properties that are
comparable to the subject property and which a buyer may select as a
competitive property. This reflects the subject’s micro market. The
information in the neighborhood section is broader and encompasses market
activity in the subject’s macro market.

I have had several FHA C E instructors tell me that page 1 is for the entire neighborhood.

 

[Riick]

Well. that's it then, next 1004 will be completed out of sequence.
First the 1004mc to get the price range
Then the 1004 - insert price range from mc report
In fact will look *forward* to software providers adding automatic transfer from mc form.
<rolls eyes>

 

[Deleted member 128537]

Many times the 1004MC trends DO NOT reflect the overall trends of the market. Thus my page 1 does not always reflect the 1004MC (although most of the time it does). That's because in rural areas there isn't enough homogeneity. For example if I am doing high end homes I may have an over supply of high end homes because there are fewer buyers in the market and more listings. But when I look at ALL homes on the market the general market can be in balance. Therefore I will put in balance on the 1004 and over supply in the 1004MC for the types of homes I'm using as comparables. Why is that so hard to understand?

That may be wrong, but I'm going to stick with that analysis. I think this entire 1004MC is a pile of horse pucky.

 

[Highlander416]

Many times the 1004MC trends DO NOT reflect the overall trends of the market. Thus my page 1 does not always reflect the 1004MC (although most of the time it does). That's because in rural areas there isn't enough homogeneity. For example if I am doing high end homes I may have an over supply of high end homes because there are fewer buyers in the market and more listings. But when I look at ALL homes on the market the general market can be in balance. Therefore I will put in balance on the 1004 and over supply in the 1004MC for the types of homes I'm using as comparables. Why is that so hard to understand?

That may be wrong, but I'm going to stick with that analysis. I think this entire 1004MC is a pile of horse pucky.

FHA wants it one way. FNMA wants it another way. It is crazy, has been since the MC form came out.

So, if you are working in a rural location as in your example above, and you are working on a higher end sale. Let's say you have one comparable at $500K in the neighborhood in the past 12 months. You have to expand out to competing neighborhoods/towns for additional data. What is the high-low-pred for FNMA. 500K-500K-500K? Seems like the classic way shows you are working on home at the high end of the price range by showing what homes are selling for top to bottom. This would trigger additional commentary and explanation. In the new way, I don't think the data is as clear.