Non QM loans and FNMA 1004

[Honey West]

Isn’t there a huge risk to an appraiser to use an FNMA 1004 form for a non- QM loan? ( think Sub-prime or run around of Dodd Frank) Doesn’t the use of the form imply the intention of submission, eventually, to Fannie Mae? While I prefer to have nothing to do with non Q-M Lenders, it’s not always immediately apparent. Also, it’s not always a C5 boarding house disguised as a duplex, it may be a qualified asset with an atypical borrower. Am interested in hearing how other appraisers deal with these ever increasing type of requests.

 

[glenn walker]

Isn’t there a huge risk to an appraiser to use an FNMA 1004 form for a non- QM loan? ( think Sub-prime or run around of Dodd Frank) Doesn’t the use of the form imply the intention of submission, eventually, to Fannie Mae? While I prefer to have nothing to do with non Q-M Lenders, it’s not always immediately apparent. Also, it’s not always a C5 boarding house disguised as a duplex, it may be a qualified asset with an atypical borrower. Am interested in hearing how other appraisers deal with these ever increasing type of requests.

No is does not imply any intention of a sale to Fannie or Freddie- Lots of agencies including FHA & VA and Ginnie Mae only purchase loans on Fannnie Forms . The Fannie Forms were designed years ago because lenders needed conformity because it was a real mess dealing with different forms. Also Fannie over the years has purchased a lot of products that most appraiser are not even aware of so we cannot second guess where the loan is going to end up. The so called Sub-Prime loans were called ALT-A loans before the meltdown and the major banks and lenders also sold many of those to Fannie Mae. The GP or AI forms are normally used for private non-lender transactions, private money, divorces, estates etc and in those cases a Fannie Form is not the correct form to use. As far as helocs that is a different animal and most are done by FDIC insured banks and lenders and their regulators, underwiters are used to Fannie Forms. So If the lender wants it on a GP form that's fine too but the appraiser has no liability if a lender wants it on a Fannie Form.

 

[CANative]

IMO, the requirement to use a 2005 v. Fannie Mae form implies that GSE/Gov. underwriting standards are expected, regardless of where the mortgage ends up.

e.g. "If it's good for Fannie, it's good for us."

 

[CANative]

Wait. I thought you were referring to Quinn-Martin loans.

 

[Terrel L. Shields]

I have no idea what a Q-M loan is...

 

[Dublin ohio]

I have no idea what a Q-M loan is...

Qualified mortgage. Non QM. Think sub prime or no doc

 

[OSU Beavers]

Sheeez, I did an appraisal for a refi on a manufactured home for a major bank. It was requested and completed on the 1004C. The borrower was complaining about having to get a new appraisal since he just had one done last month and shows me the 1004C. It was completed for his divorce. Oh well.

 

[Honey West]

I have no idea what a Q-M loan is...

Sorry for delayed reply, way too busy here! A QM loan is a “ Qualified Mortgage” home loan with Lenders meeting certain standards set forth by the Federal Gov’t, and including borrower meeting Ability to Repay per Dodd Frank...

 

[Terrel L. Shields]

The old No Doc, Lo Doc loan...hmm.

 

[Honey West]

The old No Doc, Lo Doc loan...hmm.

Deja Vu for sure.