Killing the 1004MC

[mopickled]

The MC form is just another "tool"... rhymes with stool

Why residential appraisers being charged with predicting economic trends on a case by case basis, its stoopid???

Appraisers are being forced to be title searchers, economists, home inspectors and attorneys now - all for 50% of the fee we used to earn.

We are licensed professionals - but treated like clerical staff from the temp agency, until something goes wrong - then we are licensed professionals with EnO insurance.

I don't feel "appraisers" have done this to ourselves - I blame state regulators and the ASC for neglecting to do their jobs. They allowed the overpopulation of appraisers with a complete "look the other way" attitude toward rogue appraisers.

When asked why an appraiser with over 2 dozen complaints was still appraising, my state regulator quotes "why should he be "super-zapped" for doing things that all appraisers do every day". Implying that I and my peers omit and manipulate data anytime we felt like it, like the guy in questions who is till an active appraiser.

I found this attitude to be very offensive and degrading to appraisers in general- but especially coming from a state paid employee who is in charge of maintaining appraisal integrity - I found it ludicrous.

 

[Michael Pecora]

"What form or poll isn't flawed" Two wrongs don't make a right. Because one form is flawed is no reason to develop another flawed form.
"the 1004MC certainly has limitations, but, that does not make it useless"
Here in northeastern Pa, I have certainly found it to be useless as we have many rural areas with only 3-4 sales per year.
If you really want to see a good market trend and analysis form, check out the new ERC form and see what they've done. Simple, makes sense, and can, I believe be used in all markets. Its a shame Fannie Mae can't do something along these lines.

 

[Joyce Potts]

The MC form is just another "tool"... rhymes with stool

Why residential appraisers being charged with predicting economic trends on a case by case basis, its stoopid???

Appraisers are being forced to be title searchers, economists, home inspectors and attorneys now - all for 50% of the fee we used to earn.

We are licensed professionals - but treated like clerical staff from the temp agency, until something goes wrong - then we are licensed professionals with EnO insurance.

I don't feel "appraisers" have done this to ourselves - I blame state regulators and the ASC for neglecting to do their jobs. They allowed the overpopulation of appraisers with a complete "look the other way" attitude toward rogue appraisers.

When asked why an appraiser with over 2 dozen complaints was still appraising, my state regulator quotes "why should he be "super-zapped" for doing things that all appraisers do every day". Implying that I and my peers omit and manipulate data anytime we felt like it, like the guy in questions who is till an active appraiser.

I found this attitude to be very offensive and degrading to appraisers in general- but especially coming from a state paid employee who is in charge of maintaining appraisal integrity - I found it ludicrous.

That was 'cruel'. Much like poor quality appraisals.

 

[Joyce Potts]

What in the hell is so wrong with statistics or analytics in this day and age--if used in conjunction with standard appraisal practices? Frankly, the Sales Comparison Approach can be manipulated the same way statistical data can be manipulated. If, however, you disclose the larger sampling, your logic/reasoning as to what made you select the comps you did and then further support your analysis with some kind of a supplemental 1004 MC as to average or median pricing within the larger data sampling OR-- and read this again-- OR you explain why your subject property is not necessarily an ideal candidate for a statistical analysis OH MY GOD I just screwed up. You're right. The fees don't justify that kind of analyses.

Nevermind. Just pick three sales and be done with it.

And the you wonder about $200 full appraisal fees?

 

[NC Appraising]

The 1004MC was mainly developed because a good of the appraisers are lazy, Skippie's.


Look at the majority of the appraisals during the height of the market....all were checked "stable". Really? Stable? Prices rose 20%-50% in some areas and all of these appraisals during 2006-2007 were stable. :new_all_coholic:


Lets be honest here.....................if Fannie did not develop the 1004MC, we would still have these same lazy appraisers not doing any sort of market trend analysis at all. Heck, even with the 1004MC, I'm still seeing the same Ole canned statements.....



At the very least, it forces the lazy, and Skippy appraisers to do something, because without it, they would do nothing at all.

 

[Joyce Potts]

The 1004MC was mainly developed because a good of the appraisers are lazy, Skippie's.


Look at the majority of the appraisals during the height of the market....all were checked "stable". Really? Stable? Prices rose 20%-50% in some areas and all of these appraisals during 2006-2007 were stable. :new_all_coholic:


Lets be honest here.....................if Fannie did not develop the 1004MC, we would still have these same lazy appraisers not doing any sort of market trend analysis at all. Heck, even with the 1004MC, I'm still seeing the same Ole canned statements.....



At the very least, it forces the lazy, and Skippy appraisers to do something, because without it, they would do nothing at all.

I don't think it's about being lazy nearly as much as too many appraisers were effectively trained by the lending industry underwriters-- or lack thereof-- as to what and what does not make the lender happy and profitable.

Overwhelmingly in 2004-2005 I saw appraisers conveniently re-interpret Fannie guidelines to utilize comps outside the immediate development despite ample qualified data within, in an effort to justify a higher number RATHER THAN use a market condition adjustment or other (God forbid) complex methods to interpret and support market appreciation. Most appraisers had no clue what the market condition/time category was for, much less how to use is appropriately.

Skippy ain't about lazy. Skippy is about skipping many of the pertinent details to hit the target quicker and with less hassle.

 

[prasercat]

The 1004MC was mainly developed because a good of the appraisers are lazy, Skippie's.


Look at the majority of the appraisals during the height of the market....all were checked "stable". Really? Stable? Prices rose 20%-50% in some areas and all of these appraisals during 2006-2007 were stable. :new_all_coholic:


Lets be honest here.....................if Fannie did not develop the 1004MC, we would still have these same lazy appraisers not doing any sort of market trend analysis at all. Heck, even with the 1004MC, I'm still seeing the same Ole canned statements.....



At the very least, it forces the lazy, and Skippy appraisers to do something, because without it, they would do nothing at all.

Don't say all......

What was great back then was, I happen to be in a location where there were normally adequate resales of the same homes in the same competing neighborhoods or even subdivisions without any apparent changes or modifications (the type used for trending). I could put a bunch together and arrive at a very reliable market trend - No indirect statistical measure. This was "in your face" evidence of what the price trend was - resales of the same homes (without changes, remodel or updates).

Unfortunately, when the market gets bad, slows down, this becomes much more rare as a resource.

Now, I have labored many HOURS! in some locations regarding market studies, part of which is the 1004MC form. Quite often, I put the data in for the direct neighborhood showing the 5 or 10 sales, etc., and then check the trend boxes according to the other studies I performed and which I attach to the report. This caveat is explained just below the 1004MC grid, so the reader isn't scratching their head.

The worst situations are in sparsely populated neighborhoods or even counties, when the homes are in the upper price ranges and custom. Quite often there is a very poor correlation of value to size of home and the competing market isn't really neatly bound together by simple geographic markers. Just determining how the data behaves at different price ranges, using different definitions of "neighorhood" can take many, many iterations. It is quite educational, but I find that sometimes it is impossible or nearly impossible to construct a study or parallel study or indirect study that has sufficient reliability and correlation to the subject market.

The other thing is, in a few of these reports, I have spent nearly as much time trying to work out a sufficiently reliable market study as I have for the entirety of some easy appraisals (inclusive of the market study) in densely populated spec home subdivisions.

I don't mind the effort, I just wish I wasn't working for free.

 

[George Hatch]

There are some appraisers who are big proponents of statistical analysis who are advocating that this is the way forward for the appraisal profession. Obviously the lenders like the idea of a black box as well as the idea of appraisers validating the black box. I'm not convinced that quantity is the substitute for quality (and is, well-qualified data) but I guess time will tell.

I taught a class yesterday and a couple people there are of the opinion that appraisers will end up doing a lot more "review" and reconciliation of the output of various predictive value tools and less work out in the field. It goes without saying such a transition would have a profound effect on the number of appraisers it takes to meet the demand. If the business went in that direction, that is.

 

[prasercat]

There are some appraisers who are big proponents of statistical analysis who are advocating that this is the way forward for the appraisal profession. Obviously the lenders like the idea of a black box as well as the idea of appraisers validating the black box. I'm not convinced that quantity is the substitute for quality (and is, well-qualified data) but I guess time will tell.

I taught a class yesterday and a couple people there are of the opinion that appraisers will end up doing a lot more "review" and reconciliation of the output of various predictive value tools and less work out in the field. It goes without saying such a transition would have a profound effect on the number of appraisers it takes to meet the demand. If the business went in that direction, that is.

So we will go from appraising property to appraising methods of appraising properties and reconciling the methods to arrive at or corroborate a value, rather than doing it with first hand information obtained directly by the appraiser? Like maybe it is all a fiction, since we didn't go out there personally or check the data input first hand; however, we did a good job with reconciling the fictitious output?

 

[David Mescon]

So we will go from appraising property to appraising methods of appraising properties and reconciling the methods to arrive at or corroborate a value, rather than doing it with first hand information obtained directly by the appraiser? Like maybe it is all a fiction, since we didn't go out there personally or check the data input first hand; however, we did a good job with reconciling the fictitious output?

Well said!