Mike,

Do crooked Form reporters use better articulation than crooked narrative reporters.

The key word is krooked, any form acceptable to the user is acceptable. The appraiser is not required anything but his file , USPAP and a non misleading report

FHA, FNMA, Freddie and several others have separate standards which independent appraisers agree to or not. These independents also agree to a fee.

Knowledge of income streams can be manipulated due to non understanding reviewers as well.

100% agreement from me Tom!

The fnma form as developed over the years has become so bad that many new appraisers think neighborhood description is adequate merely by putting in n,s,e and w boundary streets. Even FNMA screwed up its intent by the 1004MC which now has people thinking in terms of marketing conditions ONLY for property that is purportedly ‘similar’; with the not illogical assumption that neighborhood too must only include similar property (same subdivision).

Neighborhoods are not made up of “comparable” sale properties. They can and often do cover a vast range of properties that collectively comprise that ‘neighborhood’ or competitive market area. We now have appraisers in some parts of the country contending that a ‘neighborhood’ is only the subdivision that a subject property is in. In many other parts of the country a neighborhood is defined by half a dozen or more compatible subdivisions. While these used to tend to be homogenous, over the years greater extremes developed (through gentrification or renewal).

A neighborhood description used to be a narrative story that provided context for how the subject ‘fit’ within that area. Unfortunately, computers lack the analytical agility to discern or quantify the subtle differences in such real world neighborhoods & or competitive market areas.

But THAT is an inconvenient truth that no one in regulatory power over banks or GSEs wants to admit. It’s a paradigm of modern business and management that when data doesn’t ‘fit’ it’s easier to just throw it away or ignore it rather than finding out WHY it doesn’t fit.

But that would take human computers rather than ones that only see 1’s and 0’s and an admission that “Big Data” isn’t all that its cracked up to be.

Listing agent collusion with investors on REO sales? SAY IT AINT SO Baggs! *g* It just wasn’t worth my time to follow up on. Not even in indirect communication with a 1/3 equity owner (then) in DB. The decision makers just do not care about what is to them ‘very low level’ malfeasance in an area they already assume they are being cheated in. Truly baffles me. Can’t imagine any stock holders knowingly accepting being screwed. Then again, people that make decisions involving $756 Million potential portfolio purchases in less than 15 minutes baffle me. They live in a very different world than I do.

On it for years. Last year they decided to use “alternative reports” in my state. I would like to see the results but I am sure they are not available to us (kinda like all of the UAD data).

Fannie Mae – Suppliers

Procure One – Fannie Mae’s Procurement Portal for Suppliers, Vendors, and Real Estate Professionals…

This sub-thread running long. On that subject, didn’t tarp provide financial incentive to push the number down? On a buyer level, I dealt with all sorts of agent trickery if seeking to get ahead on shorts and discount buy plays. I watched my legitimate offers get ignored, then price push down, then cash buys, then w/ clever additional follow up research, noticed positive trends of agent collusion with investors. By denying distressed sales agents routinely double dipped with fresh listings via investor resellers. As a hud appraiser, I’m positive list agents damaged some homes w/ the intention of them being noted uninsurable. Then the home would not go good neighbor, sit 2 weeks in non-investor prohibited purchase status, and move to an actual sf live in buyer. Far less commission if dealing with financed buyers. Also some high level taxation vs income difference which played into tarp funds access. Some made fortunes on the downturn, they want to recreate the event.

There are two types of appraisals that an AVM should NEVER be considered for:

1. ERC (Relocation)

2. Foreclosure or REO related decision making.

In order to save $400 or $500 or say even a $1,000 for an appraisal, FNMA is going to use an AVM that may well leave HUNDREDS OF THOUSANDS of dollars on the table!

Eight years ago I was going to buy a legal 4 unit (previously bootlegged as a five) at full asking price plus 8%. FHA 203K. Prior sale $960,000. (Then) Current asking price $640,000 [loan balance owed plus costs]. Ten blocks to the beach in decent up and coming area of Long Beach.

Front house (units attached at rear) had broken glass on carpet and misc. minor repair needs. (Keep in mind I was an FHA approved appraiser). Agent was afraid it wouldn’t appraise FHA or it would take too long. He was from a very exclusive out of area neighborhood that hadn’t done anything FHA in 40 years except to spread uninformed rumors about it. Also a 5%/split commission broker.

Offer denied [we don’t think it was ever presented]. Cash deal sought. Price reduced to $600k; then $575k then $500k and each time we repeated offer. Full LP plus 8% with credit in escrow for that 8% back to us. After 6 months they obtained a $450,000 all cash offer. Deal fell through. Second offer finally obtained and eventually closed.

Deutsche Bank lost a full $190,000 on that one; potentially as much as $300k. Relying on a bad BPO and an out of area agent that sold million dollar SFRs. Property was easily worth $700k to $750k+ when we made our first offer.

This is truly a case where a good BPO; coupled with an informed marketing strategy specific to that property, supported by an actual appraisal could have put another 1/4 million in their pockets.

FNMA, Freddy and all the others have forgotten what a BPO was created for. But-because they NEVER gave the listing to the brokers that prepared sound BPOs and marketing strategies, brokers stopped wasting their time preparing them. They either gave them to the trainees or simply declined to do them. BPOs morphed from a marketing PLAN to a price guesstimate.

AVMs, hybrids and evaluations (as they are ordered and performed) are no different.

FANNIE MAE REO Direct panel!!?? They use AVMs (alternative reports in their words) for REOs in my state. Since we own FANNIE – we use AVMs on the properties we own.

Add additional required lender entry points after appraisal completed; (to be filled out by lender.) per my below long commentary; Amount of loan. Amount of cash out. Final funded rate. In house or saleable.

If the advocates (lobbyists) have their way the only change needed is an additional line at the end of the form saying “Value conclusion is over ridden, and concluded at 115% of appraisers value. Signed Crack-lips Lipschitz, Parking Manager, Fraudvale Community Bank.”

Oh man I could go on all day with this. Suggesting changes is as simple as pointing out current deficiencies in process and asking for clarification entry points to cure.

Navigate! https://www.fanniemae.com/singlefamily/appraisers

Oh yes, forgot to mention. Now which document form would a litigation or dispute focused person reach to first, the pdf or the xml? Insulation from litigation via proprietary coding. That seems in my opinion to be the primary benefit of the CU system. Second and possibly soon to be first place goes to the ability to monetize the data. Third place goes to the ability to monopolize the market, restrict competition, and eliminate accountable licensed checks and balances personal. I really am just a form filler. But I bring it, and manually type into every single line some form of unique content. We’re all bureaucrats now.

Proprietary coding has a more nefarious benefit. One could not litigate from the outside in, unless one participates with one of the monopolistic gatekeepers to gain proper data dissemination protocol and understanding. Actually that worked to my benefit once. This mother in law of a borrower whom is a senior investigative appraiser in my state actually picked my report apart. She railroaded the non accountable unlicensed but formerly licensed panel manager and was in direct communication with me. Completely out of the proper chain of review services. The home backs to a park it’s not adjacent to a park! And other such language detail. She’d obviously been insulated from this in her ivory tower legalese world and had never completed a UAD compliant report. I rebutted with my limited array of choices, educated her that there is additional subtext note information which I had entered for clarification in those fields only accessible via XML extraction, and then told her to take up her concerns with FNMA directly because there is nothing I could do…

No that’s not right. FNMA I believe has an individual person who manages for each and every state. They handle reo, other safeguard requests. I’m not sure what they do exactly but it’s a real position and you will end up talking to that person if you apply for the FNMA REO direct panel. They have known form change is scheduled, I heard that discussed at the NCAREA meetings like years ago. It only seems like the door for input is closed, but what is really going on is there is a plethora of advocacy from related interested parties all shouting at once. The power of the pen.

The real issue is whether FNMA should be the one to decide what needs to be in an appraisal, or should the major professional appraisal organizations? While a form is not supposed to drive the appraisal-merely report the fact is too many time-pressed appraisers tend to think filling in the boxes of the form constitutes a good appraisal report.

Maybe a better solution would be to go to full narratives much like the Narrative1 software facilitates (No, Im not a big fan of it due to difficult learning curve but it IS an option – but it does produce a decently layed out report). Downside is narratives also enable crooked appraisers to disguise or hide the steps they did not take, more than forms tend to.

One thing is certain – no matter what any new forms look like the FNMA ‘tamper proof’ limiting conditions will certainly take away more control from the appraiser and extend liabilities even further.