Killing the 1004MC

[William Rightsell]

I think its time to junk the whole 1004 form.

It was designed in an age when the client didn't have access to the automated property data we have now. In most cases, the client actually has more data available to them than we do!

And now that we have a consistent (somewhat) quality and condition grading system, there is absolutely no need for a LOT of the items on the 1004 in the subject description section. Like screens and gutters...who cares?? Not even the lender cares about that. Not to mention the fact that many of these items are redundant and appear on the grid too - like garages and/or patios. One spot on the form is enough for any one attribute.

The only things that REALLY matter to a buyer are location, quality of the home, adequate size/layout for their family, and then maybe condition. Just about everything else goes out the window. If those 4 items suit them, its on the short list for them! The rest is just time consuming dribble that really plays no part in anybody's decisions regarding the home - including the lender.

The forms need to be greatly streamlined. If clients arent willing to pay for the time it takes to type them, then they need to be shorter and more fundamental anlaysis included rather than burdening the apraiser with some 2000 blanks to fill in. After I do all my research and anlaysis, I still have more than 2 hours of writing to do (if Im lucky), sometimes three. If the actual write-up time could be reduced to the time necessary to convey the analysis and value (about 30 minutes of good solid writing), I wouldnt mind the reduced fees. All the useless physical characteristics could be gleaned from a marriage of the loan file with public record by a computer on the loan officers desk....

Get back to some analysis - not fill in the blanks.

Just my .02 cents...


todd

 

[tmon43]

Not "meaningless" in that if comparable data in the neighoborhood are sparse, such provides some support to why an appraiser either has to go outside of the neighborhood for comparable data and/or include less than reasonable data for analysis.

If an appraiser--in situations where data populating the 1004MC are sparse--is not explaining that the lack of data does not support a credible opinion of an "overall trend", the appraiser is not doing his/her job (which does not surprise me all that much).

I have had to explain that both the lack of data and the lack of any discernible trend are in fact the condition of the subject market. This usually in response to inquiries as to whether I could broaden the search to include a greater geographic area or variety of properties. Strangely enough these are the same lenders who then turn around and question why I only used those particular sales when there were x number of other sales noted.

 

[Tim The Enchanter]

I have had to explain that both the lack of data and the lack of any discernible trend are in fact the condition of the subject market. This usually in response to inquiries as to whether I could broaden the search to include a greater geographic area or variety of properties.

I've explained similarly. A dozen sales over the last year doesn't mean squat for showing a trend. Then I go on to add data from a second search broadening the search as I feel appropriate, to obtain sufficient data for analysis. And I specify my search parameters. Maybe it still shows mixed signals, but that's the market. And what else can you do.

104MC is flawed for sure. A month by month analysis would be better. If it's a difficult one, I include pretty graphs and stuff.

 

[Adios]

I would propose you write an article for Appraisal Buzz. Provide a well thought out argument as to why it is not valuable.

But more importantly propose how to repair the form. I think most agree that appraisers do need to be trending data. Remember at the beginning of the decline how appraisers were horribly resistant to acknowledging a decline.

 

[Bearslide]

I would propose you write an article for Appraisal Buzz. Provide a well thought out argument as to why it is not valuable.

But more importantly propose how to repair the form. I think most agree that appraisers do need to be trending data. Remember at the beginning of the decline how appraisers were horribly resistant to acknowledging a decline.

Once again, blame the appraisers. I gather you didn't have to tangle with lenders screaming bloody murder if you hit the "declining" box?

Many of us did - and many lost clients because we told it like it was.

A local appraiser who was present at the Fannie "Train the Trainer" sessions for UAD said Fannie concedes the form is flawed and a miserable failure...but had no solutions and weren't interested in entertaining any.

 

[Don Clark]

Once again, blame the appraisers. I gather you didn't have to tangle with lenders screaming bloody murder if you hit the "declining" box?

Many of us did - and many lost clients because we told it like it was.

A local appraiser who was present at the Fannie "Train the Trainer" sessions for UAD said Fannie concedes the form is flawed and a miserable failure...but had no solutions and weren't interested in entertaining any.

Joan needs no defense, from me or anyone else....but....I don't see she is blaming appraisers for anything that is not a fact.

I took the "Train the trainer" program taught by Fannie Mae in 2005 in a class in New Orleans. As of that date(May 2005) less than 1,000 appraisers had bothered to write Fannie Mae with concerns bout the form although a test version had been available for months.

I am sure there are lot's of excuses for not contacting Fannie Mae about the "flawed" form. I have a few myself since I did not do so. But, reality is that appraisers are generally reactive, not proactive. Not sure if it would make any difference at all to be proactive but we could at least try.

In 1998 TAF proposed a complete overhaull of USPAP. I attended a meeting of TAF in Reston Virginia in a conference on "The understandability of the standards" seminar. TAF proposed 12 standards instead of 10, and a total overhaul of USPAP. Appraisers throughout the country suddenly became proactive and killed the entire deal in less than a year.

There has been no such effort on the part of appraisers in any matter since then. Guess we like being told how to do what we do.

 

[residentialguy]

I've explained similarly. A dozen sales over the last year doesn't mean squat for showing a trend. Then I go on to add data from a second search broadening the search as I feel appropriate, to obtain sufficient data for analysis. And I specify my search parameters. Maybe it still shows mixed signals, but that's the market. And what else can you do.

If you are doing a broader search for the 1004MC results, I think that is unwise. They want comps in the neighborhood on the 1004MC. Lack of sales on the MC is support for why you to expanded search area and time frame in the sales comparison approach. What else can you do? I agree a broader seach of the whold neighborhood should be done...that belongs in the comments for page one, under the neighborhood market. I actually run the 1004MC MLS function on the neighborhood and paste them to the neighborhood comments, both with distressed sales and without (to show their influence and how a combined graph can be misleading)

 

[mopickled]

Once again, blame the appraisers. I gather you didn't have to tangle with lenders screaming bloody murder if you hit the "declining" box?

Many of us did - and many lost clients because we told it like it was.

A local appraiser who was present at the Fannie "Train the Trainer" sessions for UAD said Fannie concedes the form is flawed and a miserable failure...but had no solutions and weren't interested in entertaining any.

What she said..........

Same problem that Fannie is wining about supporting the UAD because appraisers called 63% of everything "Average" and they "created" a better system??

Now - 63 % of things will be C3 and C4 - big whoop.

The ONLY reason we didn't say Fair or Poor - is because NO lender would accept a report with these words ANYWHERE in the report - per FNMA guidelines......

 

[tmon43]

What she said..........

Same problem that Fannie is wining about supporting the UAD because appraisers called 63% of everything "Average" and they "created" a better system??

Now - 63 % of things will be C3 and C4 - big whoop.

The ONLY reason we didn't say Fair or Poor - is because NO lender would accept a report with these words ANYWHERE in the report - per FNMA guidelines......

Wouldn't 63% about cover the big swell in the middle of a bell curve? In other words FNMA was upset that the average was called average?

 

[mopickled]

Wouldn't 63% about cover the big swell in the middle of a bell curve? In other words FNMA was upset that the average was called average?

Exactly.....