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More underwriter mumbo jumbo.......

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McPheeters

Thread Starter
Junior Member
Joined
Feb 10, 2002
Professional Status
Certified Residential Appraiser
State
Oregon
I just recieved an UW Determination on my fax that states, quote "appriaser must also comfirm that the property has the same characteristic and market appeals as stick built" end quote. This is in response to a 2055 w/ interior inspect on a 10 year old Manuf. on small acreage, very rural. This is a first for me, anyone else get this? And how the heck can a manuf. home have the same "characteristic and market appeals" as a site built home? In this part of the world they are two different markets........
 

Tim Hicks (Texas)

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Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
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Texas
My reply would be a letter that states " the underwriter must confirm why they would expect a manufactured home to have the same similarities and market appeal as a stick built ? They are not the same and why would any qualified underwriter think so?"
 

jtrotta

Senior Member
Joined
Jan 16, 2002
Tim;
That would be a great response (and is from our perspective), but if you think about it why would they even ask in the first place 8O Do you think they may have no understanding of construction at all :?: Do you think they may not know what a manufactured home is :?: Does all this lead to the question as to their qualifications as a UW :?:

Their come back is more than likely going to be; Our investor needs a response :lol: If their investor has no clue with regards to the difference, I'd like their name :)
 

McPheeters

Thread Starter
Junior Member
Joined
Feb 10, 2002
Professional Status
Certified Residential Appraiser
State
Oregon
I am just amazed at the level of stupidity. Heck, my 17 year old has more common sense than that! What really gets me is that we are expected to know our profession and rightfully so and God help us if we slip up one iota!!, however who's monitoring the UW's, Brokers, Lenders ect? They can just conjur this stuff out of the blue with no reasoning or explanation.
 

Blue1

Elite Member
Joined
Jan 14, 2002
Professional Status
Certified Residential Appraiser
State
California
Paul,

You could tell the underwriter that manufactured homes have much better appeal and durability than homes made of sticks. Remember "The Three Little Pigs" when the nasty old wolf blew down the house made of sticks? :lol:

Seriously, you didn't say whether or not you used manufactured comparables. If you did, then the UW has to be 1 beer short of a six pack. If you didn't I assume you made the proper comments/adjustments, etc. Either way, it seems like a silly request to me.
 

Dee Dee

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Colorado
If you didn't use manufactured comps, the request would be valid.
Otherwise, I would have to assume that the UW lives in a manufactured home and gets easily offended if anyone suggests that it's worth less than a stick-built. People with manufactured homes are sometimes funny like that. :wink:
 

Tim Hicks (Texas)

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Joined
Jan 15, 2002
Professional Status
Certified Residential Appraiser
State
Texas
You are right Mr. Trotta. I assumed that the appraiser used only manufactured home comps. I will only use manufactured home comps in a manufactured home appraisal. I would rather drive distance to have similar properties than to make subjective adjustments on comparables sales that really aren't comparable. It really is the only way to keep the underwriter hounds off your trail.
 
P

pkbarnhart

Guest
The Fannie Mae Selling Guide (Part VII) Section 304 states

"The appraiser must address both the marketability and the comparability of manufactured housing units. The materials and construction of the improvemnts must be acceptable in the subject market area. The appraiser should also comment on the sufficiency of the living area of the unit, interior room size, storage, adequacy of rof pitch and overhangs, and the compatability of the exterior finish. In addition, the appraiser must address the marketability and value of manufactured housing units in the subject market area in comparison to the marketability of site-built housing in the area."

In other words it looks like the underwriter might be doing his/her job, especially if you used any stick built homes as comparables. Feel free to copy the above into a letter, then address your comparables. I typically put a comment such as "while manufactured homes appear to have a lower per square foot market value than similar sized site built homes the subject value is supported by the sale of similar manufactured homes."

Fannie states further "If comparable sales of similar units are not available, the appraiser may use site-built housing as comparable sales, as long as he or she explains why that is being done. When there is a preference for site-built housing in the subject market area, the appraiser must adjust the site-built comparables to reflect the market's reaction to manufactured units."
 

Jo Ann Meyer Stratton

Elite Member
Joined
Jan 16, 2002
Professional Status
Certified Residential Appraiser
State
Arizona
The underwriter has two paragraphs of Section 304 confused and jumbled together. In the second paragraph of 304 is the comment: " A manufactured housing unit must be legally classified as real estate, must be permanently affixed to a foundation, and must assume the characteristics of site built housing to be eligible as security for a mortgage that is delivered to Fannie Mae".

Just because it has assumed the characteristices of site built housing (wheels, axles, hitch removed, perimeter enclosure) does not mean it has the same market appeal as site built housing. The marketability and comparability (as pkbarnhardt quoted from the 304) is a separate issue.

I usually have a statement in my reports similar to as follows: "Wheels, axles and tongue have been removed from the unit and it is installed above ground level (or at ground level) per state requirements for a foundation. Footings appear to be below the frost line (frostline is the top of the dirt in my area-otherwise I would not comment on the frostline) and a concrete block (or whatever) perimeter enclosure has been installed. Improvements constructed after the HUD building codes developed. Improvements have the design and characteristics of site built housing due to its hardboard siding, and pitched composition shingled roof." (statement is revised if an older mobile home, not built to HUD code, with aluminum siding and roofing) That covers the paragraph in the 304 quoted above.

Then typically all my comparables are other manufactured homes, also built to HUD code. If one or more of the comparables built prior to June 15, 1976, I comment about that comparable being built prior to the adoption of HUD code--usually have an adjustment also. Once in a great while, the manufactured home will be top of the line with a lot of bells and whistles, 2" x 6" construction exterior, 2" x 4" interior walls, vaulted ceilings, drywall interior throughout, etc, etc, etc so I might also use one site built comparable--which has a downward adjustment in my market and lots of description. This paragraph takes care of the part of 304 that pkbarnhardt quoted.

I did an analysis of my two counties several days ago and realized that approximately 30% of the residential properties in my area are manufactured homes and old mobile homes. My area does not have building codes, I would make a guess that half of the on site built homes in the area would not meet building codes if they were enforced. FHA and VA financing is not too common here. FMHA financing is very common in several of our tract subdivisions (the only tract subdivisions in the area). A lot of site built homes in the area were built by owner or added on by owner without any inspection by any building inspector or advice from a licensed contractor. So quite frequently the manufactured home built to HUD code is superior in construction quality to the site built, but people refuse to live in a "trailer" and buy the homeowner built home with crooked walls, patched together electrical wiring, poor floor plan, etc, and pay more than what the resale manufactured home on site with porches, covered parking, landscaping would have cost them. My area also has a per capita income of less than $25,000 a year and majority of residents can't wait two to three years for a home to be built or afford the construction costs of a new on site built home.
 

McPheeters

Thread Starter
Junior Member
Joined
Feb 10, 2002
Professional Status
Certified Residential Appraiser
State
Oregon
Only manuf. comps were used in my report. The area is very rural and has a limited inventory of properties for sale making site built and manuf. homes compete for the same buyer (all other things being equal, square footage, site size, ect.) However that is not the same thing as saying that the subject has "the same characteristic and market appeals" as a site built. If a buyer has a chioce between that same property with a stick built or manuf., the market shows that they'll go for the stick built and only take the manuf. if thats all thats available. Does that give the manuf. the same market appeal? Maybe it does............
 
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