Real Estate Appraiser Tips » FNMA 1004MC Addendum

Real Estate Appraisers: Webinar Replays of David Braun’s Two Recent Regression Seminars

http://realestateappraisertips.info/ — Thu, 02 Sep 2010 13:54:28 +0000

http://www.realestateappraisertips.info/ – Real Estate Appraisers: Webinar Replays of David Braun’s Two Recent Regression Seminars

Veteran Appraiser, David Braun, MAI, SRA of Automated Valuation Tools, recently held two Webinars on Regression Analysis. The details of these webinars are found here: http://www.workingre.com/workingre/avt-free-webinars-081310.htm. The first Webinar was an introduction to Regression. The second Webinar covered what Automated Valuation Tools has done to facilitate the move towards regression analysis in appraisal practice, regression case studies and an introduction to the “Fusion” product that can help faciliate this process. These two webinars were in partial preparation for the “LIVE” Regression Analysis training to held in 3 locations in 2010: Nashville TN (Sept. 23-24), Chicago IL (Octobert 21-22) and San Antonio TX (November 18-19). To Register, Click Seminars!

To watch the video of Webinar 1: “Introduction to Regression Analysis”

1) Load the required Webex viewer (click run to load):

http://automatedvaluationtools.com/media/nbr2player.msi

2) Click the following link to watch the video:

http://automatedvaluationtools.com/media/Introduction_Regression_Analysis.arf

NOTE: When Webinar 2 becomes available, Tips will post the link!

Tags: Regression Analysis, 1004MC, 1004 mc, 1004-mc, Automated Valuations Tools, David Braun, Real Estate Appraisers, Statistical Appraising

This webinar is about 40 minutes long.

Dave Towne To Home Appraisers: New Fannie requirement – Active Listings

http://realestateappraisertips.info/ — Wed, 01 Sep 2010 19:03:17 +0000

http://www.realestateappraisertips.info/ – Dave Towne To Home Appraisers: New Fannie requirement – Active Listings

While this is for Washington State Appraisers, this may be broadly help to us all.

Appraisers……….

(In WA State – Matrix software via NWMLS)

FannieMae, effective TODAY, wants the MC Form ACTIVE LISTINGS (Total # of Comparable Active Listings) info to be reported as those properties active on a specific day in the MC form columns. Some MLS systems cannot provide that data (Matrix cannot, yet).

The specific day is the ‘first’ day (closest to the Effective Date) of that time period, not the last day.

Because my area MLS cannot provide this data, the screen shot below shows how I report this. Note that NO TREND can be reported on that line, or the line below, because only one column has data.

We are required to EXPLAIN why certain info cannot be provided. The screen shot below is from my report MC Form Scope of Work addendum, which basically says some info on this wonderful form is junk. You can use this verbiage if you like:

1.) The 1004MC requests historical Listings data (gray fields and right column). The local MLS cannot provide historical Comparable Active Listing data as requested. The only Listing data available is current Active Listings as of the date and time queried. The appraiser has provided the number of active Listings in the Current – 3 Months column as of the date and time of the analysis is if available.

CAUTION: Appraisers who use the California based appraiser’s Excel spreadsheet to derive the MC Form data (or any other version) may want to verify that process to be certain the Active Listing info is reported correctly. (I don’t use this in my reports or for analysis.)

Home Appraiser Warning: Chase Bank’s FNMA 1004D requirements

http://realestateappraisertips.info/ — Thu, 17 Jun 2010 11:19:04 +0000

http://www.realestateappraisertips.info/ – Real Estate Appraiser Tips! Home Appraiser Warning: Chase Bank’s 1004D requirements

NOTE: I fully agree and endorse what Dave Towne is saying below. Before I received Dave’s email, I was reading these new 1004D requirements and chuckling to myself in unbelief. Unless the fee is raised substantially, I have no plans on completing these 1004D request.

From Dave Towne:

“Appraisers…….

The info below arrived late on 6/16/2010. What this is, is a drive-by appraisal report for a (probable) 1004D fee……..typically much lower in price than the drive-by fee would normally be.

Nowhere on the 1004D form Update does it indicate this level of reporting. The form says the appraiser must ‘summarize’ the info reported. There is no Fannie requirement (that I know of) that ‘new’ comps be driven and photo’d. But…you’d better damn well have a complete work file and data to justify how you answer the 1004D Update ‘Yes/No’ question. Fannie’s instructions to lenders say that if the question is answered ‘Yes’ then the lender must order a new appraisal.

This Chase requirement circumvents that process, and forces the appraiser to do a basically full blown appraisal prior to completing the 1004D.

What you do with this type of assignment is of course your own business decision. What you charge is your decision also. You do not have to accept the fee OFFERED by Quantrix (the senders of the Chase requirements). And you do not have to do the 1004D, even if you were the original appraiser.

This is just another recent example of escalating order and inspection requirements (probably) without properly compensating appraisers for what is being requested.

I hope you will make the correct decision for yourself and for appraisers nationwide when/if you get one of these new Chase 1004D requests.

Dave Towne

(My BOLD below)

Chase’s NEW Appraisal Requirements for the following 2 products: 1004D-Appraisal Update and 1004D-Final Inspection and Appraisal Update. The requirements apply to the “Summary Appraisal Update Report” section of the 1004D. These requirements are in effective as of today (6/16/2010).

Chase Appraisal Requirements for a 1004D-Appraisal Update

Note: These requirements apply to the “Summary Appraisal Update Report” section of the 1004D form when either of the following products is ordered:

1004D-Appraisal Update
1004D-Final Inspection and Appraisal Update

The appraiser performing the Appraisal Update must, at a minimum:

· Perform an exterior inspection of the subject and new comparables from at least the street.

· Research, verify, and analyze current market data in order to determine if the property value has changed since the effective date of the original appraisal.

· Include an extraordinary assumption that the interior finish and condition are the same as the original inspection.

· Indicate on the 1004D form if the market value of the subject property has declined since the effective date of the original appraisal report.

· Provide a new sales grid with three new comparable sales that have closed since the effective date of the original appraisal to support your conclusion. Note: Listings may be included as a 4th, 5th comp, etc. if needed to support your conclusion. (We do recognize that the additional comparables being supplied with the Update may not be better, or more indicative of value, than the comparables used in the original report. Regardless, Chase underwriting needs to account for market activity occurring in the period since the original report date, so new comparables which closed after the effective date of the original appraisal must be provided.)

· Provide a new original front photo and a new original street scene photo of subject.

· Provide an original front photo of all new comparables provided on the grid.

· Provide a location map showing the subject property and all new comparables. Note: the neighborhood boundaries must be clearly visible on the location map.”

Appraiser Video Marketing: Recording Video Conference Calls For Your Appraisal Video Blog

http://realestateappraisertips.info/ — Wed, 07 Apr 2010 15:46:35 +0000

http://www.realestateappraisertips.info/ - Real Estate Appraiser Tips! Appraiser Video Marketing: Recording Video Conference Calls For Your Appraisal Video Blog

In this video, I’m venturing into video conferencing with a local real estate broker about the how the changes within the appraisal industry are impacting the local real estate market. For these calls, we’re testing out www.oovoo.com to see if we like their service.

Tom Horn, SRA: HVCC One Year Later….Are We Better Off?

http://realestateappraisertips.info/ — Tue, 06 Apr 2010 20:38:43 +0000

http://www.realestateappraisertips.info/ - Real Estate Appraiser Tips REBLOG: Tom Horn, SRA: HVCC One Year Later….Are We Better Off?

Thomas C. Horn, SRA, with Birmingham Appraisal Blog, Discusses HVCC One Year Later! Be sure to visit Tom’s Appraisal Blog, check out his other very interesting articles and leave a comment!

Well, its been almost one year since HVCC has been in effect (come May 1, 2010 it will be 1 year). The question everybody is asking is: Are we better off? From my own experience as an appraiser I have to say “No”. Since the HVCC was put into motion I have seen average appraisal fees slowly decreasing. I constantly get notices from clients stating that in order for them to be more competitive with others they must lower the costs associated with appraisal reports. We really do not have any choice; if we want to continue to receive work from these companies we must lower our fees.

In contrast, the fees being charged to homeowners has increased. This “gap” between what the appraiser is being paid and what the homeowner is being charged is the fee that the AMC (Appraisal Management Company) is receiving for their services. In addition to the lower fees, turnaround time requirements are being decreased. With lower fees, and shorter periods of time to complete assignment, quality is suffering. Increasingly AMC’s use fee as their only criteria for choosing their appraiser, even at the expense of appraiser/appraisal quality. Many times the AMC will hire and “out of area” appraiser for a job just because their fee is the lowest, even if the appraiser is not familiar with the area. This has created problems with geographic competency, which just means that appraisers are doing appraisals in areas they are not familiar with.

Appraisers are not the only ones suffering. A recent survey sent to Realtors indicated that appraisal reports are taking longer to complete, which in turn extends the time needed to close the loan. In some instance the delay has caused the sale to be cancelled. The issue of geographic competence has also affected the appraisal values of some properties. Appraisers who are not knowledgeable in certain areas are providing inaccurate appraisals which can cause sales transactions to be cancelled.

There are many more examples of how the HVCC is adversely affecting the various industries that rely on appraisal services. Do you have an example that has not been mentioned? Have you found the opposite to be true? I would be interested in hearing from you.

How SMART Appraiser Software Aids In Forensic Real Estate Appraisal Assignments

http://realestateappraisertips.info/ — Tue, 06 Apr 2010 17:39:53 +0000

http://www.realestateappraisertips.info/ - Real Estate Appraiser Tips: How SMART Appraiser Software Aids In Forensic Real Estate Appraisal Assignments!

I received a retroactive FNMA 2055 order recently with the effective date of 02/13/2008, more than 2 years ago. Ordinarily, this would have been a difficult assignment to “EASILY” report actual market conditions at that time period (2/13/2007 to 02/13/2008) in terms of:

1.) Months Supply Of Housing On Market
2.) Number of Competing Listings Back 2 Years Ago
3.) If There Was An Oversupply
4.) Listing To Sales Price Ratio

I quickly downloaded my MLS results for that time period, defined my “submarket” and found that this market had already begun it’s decent from post Hurricane Katrina highs with a minor declining market.

SMART does something my own MLS can’t tell me or won’t tell me – the number of Comparable Listings during the 1/13/2007 to 1/13/2008 market period, 21, 7 and 2 2 in the most recent 3 month period.

SMART easily shows declining number of Total # of Comparable Sales (Settled) from 16, 6 to 2 in the most recent 3 month period.

SMART easily shows declining Median Comparable Sales Price from $189,279, $197,000 to $184,400 in the most recent 3 month period.

SMART ALSO HELPED ME QUANTIFY THE RESULT OF 8,461 POST HURRICANE KATRINA SALES ON MY LOCAL MARKET BELOW – Overall a +19% Gain Virtually Overnight!

The +19% is the median sales price of ALL 8,461 sales representing median sales price both one year before Katrina and one year after. Yes, some areas of my market gained 25%, 30%, 40% and possibly 50% gains, which were sustained for years after the hurricane.

NOTE: I’m not a salesman for SMART Appraiser Software (No, I wasn’t paid to make this endorsement). Real Estate Appraiser Tips is about offering Tips on what’s helpful to appraisers in their daily processes. Since 3/2009, I’ve found SMART to be one of the best tools for Today’s Residential Appraiser. http://www.smarterappraising.com/

Home Appraisers Tip Of The Day 11/30/09: Thank You Kathleen Bryce For Today’s Tip!

http://realestateappraisertips.info/ — Mon, 30 Nov 2009 12:52:32 +0000

http://realestateappraisertips.info/ -Thank You Kat Bryce For Teaching Me This Real Estate Appraiser Tip!

I wanted to send out a special thanks to Kat Bryce for this real estate appraiser tip she gave me this morning regarding extra support for market trends analysis and quantifying time or market conditions adjustments within residential appraisal reports. Kat told me to go to http://www.realquest.com , type in the full address (like 404 Sherron Ave Baker LA 70714) and click enter. When the results appear, click on the “Market Trends” button on the left side of screen, see image below. This advice helped me backup my justification for “declining market” with proper adjustments applied.

NOTE: To See A Larger View Of This Example, Click On The Chart!

Baker Louisiana Realquest.com Market Trends Small

Again, a special thank you to Fort Myers, Florida Appraiser, Kat Bryce, for her help today!

Kat Bryce, Fort Myers Florida Home Appraiser

Learn More About Kat Bryce @ http://www.leecountyappraisers.com

Bryan Reynolds On Appraisal Scoop Discussing Real Estate Appraisers Analyzing The Housing Market Qualitative vs. Quantitative

http://realestateappraisertips.info/ — Sat, 03 Oct 2009 01:49:50 +0000

http://www.realestateappraisertips.info/ - Bryan Reynolds On Appraisal Scoop Discussing Real Estate Appraisers Analyzing The Housing Market In Qualitative vs. Quantitative Methods

This is a recommended article I found on Appraisal Scoop for analyzing housing markets. Link To Article Is Here! Here’s a snippet:

“Most of us learned this crazy business by filling out a form.For me, it was actually preparing forms on the good old typewriter, and since clients didn’t accept White-out, if you made one mistake, you retyped the whole thing …. in my case, normally after almost completing the entire report. My education truly began when I started actually thinking, securing meaningful education and not merely form-filling thanks somewhat to George K. Cox, MAI, SRA.

It’s time for all of us to step back, re-evaluate and employ a little common sense. Most preprinted forms utilize a Quantitative Appraisal Method while a Qualitative Method is more is line with how buyers really act.”

Bryan S. Reynolds is a Certified General Real Property Appraiser and an AQB Certified USPAP Instructor. Mr. Reynolds serves as an adjunct faculty member of The Columbia Institute, and is an approved appraisal instructor in 31 states.

Reynolds is the owner of Reynolds Appraisal Service in Owensboro, KY, providing various residential and commercial valuation services, consulting and litigation support services throughout the area. He can be contacted at (270) 929-3088 or by email at bryan@reynoldsappraisalservice.com

Visit Appraisal Scoop And Sign up for Email Updates!

18 Month Moratorium On HVCC WILL NOT Cure The “Low Appraisal” Disease Issue

http://realestateappraisertips.info/ — Sat, 27 Jun 2009 16:47:21 +0000

http://www.realestateappraisertips.info/ – HR 3044 18 Month Moratorium On HVCC WILL NOT Cure The “Low Appraisal” Disease Issue

I’m reading this morning from the Mortgage New Daily Email about “HR 3044: To Impose 18-month Moratorium on HVCC“. The reasons given for the moratorium are these below as directly quoted:

“In the period of time since its implementation, the HVCC has increased costs to consumers and decreased the quality of appraisals and has provided a level of uncertainty in an ailing housing market. Tens of thousands of consumers have already been robbed of their opportunity to enjoy historically low rates by Attorney General Andrew Cuomo’s rule.”

However, according to the media generated buzz, the outcry in the past 3 weeks hasn’t been so much been about HVCC but the media issue of “Low Appraisals”. Just look at these recent headlines:

Bloomberg: Home-Price Recovery May Be Undermined by Appraisals

Christian Science Monitor: Are low appraisals slowing US home sales?

CNN Money: Appraisers wrecking builder sales?

The Tennessean: Low appraisals nip real estate deals

Steamboat Pilot, CO: Appraisal rules wreck real estate deals

and my favorite of all:

Joe Weisenthal: The NAR’s Appalling Fight Against Honest Appraisals

Yes, it’s true that if the Appraisal Management Companies (AMC) are sending appraisers from 2 hours away to perform an appraisal on a home just because they must use appraisers from a rotating roster, an appraiser that doesn’t know the market in the subject’s neighborhood, then that’s a problem and could result in a “low appraisal”.

However, I like Ben Goheen’s response to the irresponsible comments NAR’s Chief Economist, Lawrence Yun, made this past week blaming appraisers for the lack of a housing recovery, and I quote:

“Mr. Yun is now insisting that appraisers ignore market conditions so houses can sell – isn’t that convenient?

Since every market is local, nobody can rightfully make generalizations about how foreclosures should or shouldn’t be used as comparables in an appraisal. They may be inconvenient, but they are real and often can’t just be ignored. As a Realtor you just have to be aware how they effect your market when writing an offer.”

An 18 Month Moratorium WILL NOT make the Fannie Mae 1004MC Addendum disappear – the 1004 MC is the chief determiner of housing “sub-market” direction and quantification. An 18 Month Moratorium WILL NOT keep appraisers from interpreting housing markets properly. An 18 Month Moratorium WILL NOT all of a sudden give appraisers a set of rose-colored glasses to view their local housing markets. An 18 Month Moratorium WILL NOT keep appraisers from applying “declining markets adjustments” when they are obviously evident and provable by a simple MLS chart. An 18 Month Moratorium WILL NOT keep appraisers from applying the mandated “listing-to-sales-price-ratio” to the 3 current listings they are now required to use in their reports. No, an 18 Month Moratorium WILL NOT keep appraisers from obiding by USPAP, lender guidelines, general appraiser liability issues and/or erase common sense. When an appraiser studies a housing “sub-market” and sees a chart like this below, the appraiser has to do what they have to do – apply declining markets adjustments if warranted.

Bill Cobb is a Louisiana State Certified Residential Appraiser operating as Accurate Valuations Group in the Greater Baton Rouge Market. Bill has 17 years experience as a residential appraiser and carries on the family appraisal career tradition as a third generation appraiser. To learn more about AVG, visit: http://www.batonrougerealestateappraisers.net/

Home Appraisal Software: SFREP Announces Release of Appraise-It Version 8.3

http://realestateappraisertips.info/ — Mon, 15 Jun 2009 01:25:17 +0000

http://www.realestateappraisertips.info/ – Home Appraisal Software: SFREP Announces Release of Appraise-It Version 8.3

From SFREP:

“SFREP is proud to announce the release of Appraise-It v.8.3, a new version of Appraise-It rewritten from the ground up in a new, more modern 32-bit architecture specifically designed for Windows XP, Windows Vista and the forthcoming Windows 7. Appraise-It v.8.3 is up to four times faster than previous versions while maintaining backwards compatibility and operating in almost the exact same way. Please keep in mind, though, that older products like Sketch-It and the Photograph-It (non-Plus) will NOT work with this or any future versions of Appraise-It.

Appraise-It v.8.3 includes the following new features:

Online Automatic Registration
Newly redesigned File Index
Newly redesigned Lender Database
New 32-bit Version of Wincomp Comparables
Text Addenda with Signatures added to all reports
Ability to select Standalone or Network Install
New HVCC Appraiser Independence Certification Addendum
Up to 4 times faster

This new version of Appraise-It includes, for the first time, an online automatic updater. Although we have included your new approval codes at the end of this email, most of you will not need them. Simply install Appraise-It and when you run the program for the first time, it will automatically connect to our servers over the Internet and register itself in seconds.”