Category: Fannie Mae – Freddie Mac

GLA Adjustment & Pizza Slices – They Do correlate! 15

GLA Adjustments & Pizza Slices – They Do Correlate!

Determining the GLA Adjustment in Appraisal Reports I promised in a previous post I’d send out my method for determining the GLA adjustment in appraisal reports. Goodness! Appraisers actually found that statement buried in the prior post, and have ‘rung my chimes’ requesting this info! OK, but first, the pizza analogy. I often tell clients and other appraisers that appraising (residential) real estate is far more complex than grabbing a store-bought pre-boxed pizza (that has exactly the same ingredients from box to box no matter which store you shop in) at a grocery and then applying 425 degrees of love...

Expert Witness AMC Order Blast & Appraiser's Response 5

Expert Witness AMC Order Blast & Appraiser’s Response

AMC’s order blast for Expert Witness Appraisal Services Before I can offer ANY bid, you folks need to decide whether you want a FNMA 1004 form, a 1073 form or a 1025 form. If the latter is sought, then a 1004MC would not appear to be relevant. I am expert witness qualified in Los Angeles County Superior Court. In addition to the base fee (due in advance) which starts at a minimum of $1,500 for SFR, $2,000 for a condo and $2,500 for a 2 to 4 unit rent controlled property in Los Angeles, I charge $350 an hour for...

CU Robot Keeps Score on Appraisers 50

Collateral Underwriter Crumbles

CU Robot Keeps Score on Appraisers Appraisers, No, this is not about “cuukie” crumbles. It’s about what the Fannie Mae Collateral Underwriter (CU) process is finding in far too many appraisal reports. A few days ago, I had an opportunity to speak with someone on the ‘inside’ of Fannie Mae. The discussion evolved to “what are the most serious items the CU process is finding in appraisals?” The CU process, which became effective January 26, 2015, is a giant electronic robot collecting tons of specific data from submitted appraisals to FNMA. This data can then be tied directly to the...

ppraisers Under Siege & Cost of Appraisals 31

Appraisers Under Siege & Cost of Appraisals

Appraisals that were just $400 are now $550 This little ditty of a few hundred words is via Jonathan Miller’s Housing Notes blog on June 24, which I hope he, and Mr. Chrisman, won’t mind if I re-post. I added a bit more below: Appraisers Remain Under Siege Miller: The banks have won and the appraisal industry has lost. At least for now. Here is a series of feedback from Rob Chrisman (Mortgage News Daily blog) in his must read newsletter on the mortgage industry. It is a heavily read source of in-the-trenches mortgage insights that I subscribe to. He...

Market Action and Reaction 5

Market Action and Reaction

I believe it is time that we take a practical look at what a subject’s market is… Drawing on part of my heritage, the Native American Cherokee part, “Many Moons Ago” when I was employed as a Management Consultant/District Director for a Century 21 Franchisor, one of the challenges that I faced in dealing with over 50 separate brokerages was helping these often small brokerages define their markets. There was a theory that someone had come up with that it was about a 3 mile radius around their office. Well, in some cases that would have put some markets in...

When Residential Appraisers Fail to Bracket 5

There Go My Brackets

When appraisers fail to bracket… Forget college hoops and all of the upsets. This is about the upsets that occur when residential appraisers fail to bracket. Say that your subject property has a contract for $102,900. Ideally your three sales should surround the contract price like a cozy, warm blanket. Comp #1 might end up, after adjustments, at $100,000. Comp #2 might reach $102,500 and Comp #3 might conclude at $104,000. Yay! All you need is a pretty bow and you can deliver a lovely report to your client. But…it really doesn’t work that way on most days. Does it?...

Standardized Data & Death of Residential Appraiser 30

The Death of the Residential Appraiser

Standardized data & the death of the residential appraiser (as we know it today)… Those that know me on a personal level and that have worked with me over the years have had to hear me talk endlessly about the pending death of the residential appraiser. The other day I eluded to it at the end of another long post. I figured it’s time to share the thoughts with everyone. First off, I come from a long career in corporate America and spend 20 years working in everything from manufacturing, order administration, marketing, sales, and engineering. One thing always held...

AVMs can Never replace Appraisals 34

AVMs Can NEVER Replace Appraisals

AVMs Can NEVER Replace Appraisals & why FNMAs vaunted CU AVM is flawed! Yesterday (March 15, 2016), an appraiser called me to discuss a complex assignment he had. One of his comparable sales was reported in MLS as having sold for $3,469, 898. It was in range with his other comparable sales for his subject property. It was the most similar comparable property. When he went to verify the sale price with our Los Angeles, California subscription-equivalent to “public records” he discovered a shocking discrepancy he couldn’t explain. RealQuest (CoreLogic) showed the full value sale price as $17,665,455! So what...

Desirable - banned Fannie Mae words 8

Desirable, Rite or Rong?

Desirable, banned or permitted? I was caught up in a minor ‘dispute’ last week when a review appraiser wacked my knuckles when I described a ‘neighborhood’ as being “Desirable.” My original message was re-distributed on various forums and I’ve tried to read all comments to see how I might learn from this episode. Lots of appraisers offered their input. Some supportive and positive, some cautionary, and some who believe much of what we have to deal with is pretty trivial. “Banned words” were originally identified in the Fair Housing Act law many years ago (not the EEOC law as I...

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Collateral Underwriter, What’s Under the Hood?

Collateral Underwriter – Garbage In, Garbage Out (GIGO) FNMA has a fascination for first patenting garbage, & then implementing it as policy! FNMA simply LIED! Collateral Underwriter IS an automated ‘appraisal review’ despite disclaimers. It was never intended as anything else. Read the patent application below. Before I get into the details, I want to ask each reader to forward this to every appraiser you know. This concerns FNMA’s patent of the seriously flawed techniques and underlying support for their Collateral Underwriter (CU) Risk Rating “System”. It’s time for appraisers to take action against the unreliable system which is unfairly...

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