FNMA September revised FAQs

[andrew81]

The Q&A, in no uncertain terms, instructs that the 1004MC data match the neighborhood sales range data on page 1;

Neighborhood Characteristics

What type of properties are to be analyzed for the data reported in the One-Unit Housing Trends portion of the Neighborhood section of the appraisal report form?
The data regarding trends to be reported in the One-Unit Housing Trends section must be reflective of those properties deemed to be competitive to the property being appraised.
Additional commentary should be provided on the other segment(s) of the neighborhood when segmentation is present to aid in understanding the overall neighborhood dynamics.

so is it the NEIGHBORHOOD or the COMPETITION?

Neighborhood Characteristics

fannie mae has now redefined the word neighborhood to be understood as the word competitive.

The purpose of this addendum is to provide the lender/client with a clear and accurate understanding of the market trends and conditions prevalent in the subject neighborhood.

...market conditions as reported in the Neighborhood section of the appraisal report form... Sales and listings must be properties that compete with the subject property, determined by applying the criteria that would be used by a prospective buyer of the subject property.

FNMA again said they want the neighborhood and the MC to match. the argument has always been that the neighborhood listings/sales are not always competition. this time they redefined neighborhood to be competitive.

 

[Mr Rex]

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

The macro market may be larger than a "neighborhood".

 

[RSW]

The macro market may be larger than a "neighborhood".

And?....................What does that have to do with the subject's neighborhood?

 

[Carnivore]

so is it the NEIGHBORHOOD or the COMPETITION?
fannie mae has now redefined the word neighborhood to be understood as the word competitive.
FNMA again said they want the neighborhood and the MC to match. the argument has always been that the neighborhood listings/sales are not always competition. this time they redefined neighborhood to be competitive.

They have not redefined anything. They have clarified what they have always said, even before the 1004MC.

An appraiser is never wrong if he/she uses sales data from identical(or close as possible near identical) markets irrespective of how far away they are from the subjects specific immediate location/neighborhood. This is assuming that you as an appraiser are not ignoring factors/data in the immediate subject market.

The message I believe they are conveying is not just to appraisers, but to intended users of your report. i.e lenders, AMC's or whoever. IMO they are the problem, not appraisers.

OK, here is my take on and solution to the FHA & FNMA difference.

Do the report following the what ever 800 lb gorilla your writing the report for.

If your assignment is FHA, make a declarative statement in your report in regards that the development/reporting differs from FNMA. Go further with the statement stating that this appraisal is not in compliance with FNMA for secondary market purposes. If its FNMA then make a declarative statement that the Appraisal is NOT In Compliance FHA 410* or whatever and not eligible for conversion to FHA.

Why have I said the above? Well FHA sometimes sells the loan to FNMA. Maybe I should say FNMA sometimes purchases FHA loans.

Frankly I don't care how I have to do 1004MC. If its FHA then so be it. If its FNMA then I do it there way.

I ALWAYS add my own supplemental Market analysis in the report. Always!

I don't care what an AMC thinks. They are nothing to me but an ignorant impediment in the appraisal/loan process.

 

[DJBanas]

Stupid question of the day - Why does Fannie resist publishing a guide like the FHA 4150 where it tells appraisers what is expected in each space on the form - the Fannie created form!!!!

They could hire 2-3 appraisers on a contract basis and probably knock it out in a few weeks, less if they copy and paste sections from the 4150.

Every time they publish something like these FAQs they always have unanswered questions. We should not have to interpret or guess what they want. We have enough to do in interpreting and analyzing the market data.

So much for my dreaming...

 

[Carnivore]

Stupid question of the day - Why does Fannie resist publishing a guide like the FHA 4150 where it tells appraisers what is expected in each space on the form - the Fannie created form!!!!

They could hire 2-3 appraisers on a contract basis and probably knock it out in a few weeks, less if they copy and paste sections from the 4150.

Every time they publish something like these FAQs they always have unanswered questions. We should not have to interpret or guess what they want. We have enough to do in interpreting and analyzing the market data.

So much for my dreaming...

They have been since I started appraising 25 years ago. Its called the FNMA Selling Guide.

https://www.fanniemae.com/content/guide/selling/index.html?cmpid=sln040114

Everything you need to know for a FNMA compliant appraisal is right there. Additionally their FNMA FAQ's.

Here is something cool http://fanniemae.articulate-online....8cd7&Popped=True&v=9&&InitialPage=player.html

 

[DTB]

Only a GSE could think neighborhood and competing properties is one and the same thing.

Only a GSE could think less data points makes for a more accurate trend representation.

It's a mixed up muddled up shook up world except for Lola.

 

[DJBanas]

They have been since I started appraising 25 years ago. Its called the FNMA Selling Guide.

https://www.fanniemae.com/content/guide/selling/index.html?cmpid=sln040114

Everything you need to know for a FNMA compliant appraisal is right there. Additionally their FNMA FAQ's.

I keep the .pdf copy of the Selling Guide handy. I was talking about a step-by-step section like the 4150.2 includes.

 

[Carnivore]

I keep the .pdf copy of the Selling Guide handy. I was talking about a step-by-step section like the 4150.2 includes.

They use to have a Appraiser Guide. It was a condensed version of the FNMA selling Guide directed at you the appraiser.

I thought about authoring just such a manual. I realized that it would be non-profit because every appraiser out there would get a free copy! Just Like ANSI, if you don't have it your crazy because its readily available for FREE. Just ask any longtime appraiser at this forum. Its where I got my copy in PDF.

 

[Non Sequitur]

Only a GSE could think neighborhood and competing properties is one and the same thing.

Only a GSE could think less data points makes for a more accurate trend representation.

I agree, complete fail IMO. But the Fannie has spoken, let it be written let it be done.

The rest of the QAs cover basic stuff, but Q22 sticks out. "Yep, we'll take a loan on a private street with no maintenance agreement, but if there's a loss you're responsible." Nice.

Overall there's some good info in the FAQ. Now how many will take the time to read any of it? That's the issue.