Tagged: FNMA

September 21, 2020

Highest and Best Use

Appraisers, I had a recent discussion with a review appraiser, who discussed a ‘situation’ with me. It involved Highest and Best Use (H&BU), and the appraiser’s reluctance to re-do a report so that a loan could be made. The appraiser had checked the H&BU question box on page 1 of the 1004 form as “NO”, which immediately stops the lending process. This H&BU topic is sometimes difficult for appraisers due to many variables which need to be analyzed. The twisted part of this situation (which influenced the appraiser’s H&BU reporting) is the property is in an area where some, not all,...

Appraisal / Appraisal News / Appraisers News / Fannie Mae - Freddie Mac

June 19, 2020

Potential Changes to GSEs Gaining Steam

Folks, if you have not been hiding under a rock since 2009, you know that both FNMA and FrMAC have been under ‘conservatorship’, regulated by FHFA for over the past 10+ years. If you’ve been paying attention, you also know that over the past few years there has been increasing talk to end the conservatorship, and now, to add competitors to the GSE’s in the mortgage loan purchase arena. That prospect is outlined in the latest Report to Congress by Mark Calabria, Director of FHFA, summarized in this article posted Tues, June 16, 2020, in Mortgage News Daily: The Federal...

Appraisal / Appraisal News / Appraisers News / Fannie Mae - Freddie Mac

June 17, 2020

Professional Opinions Can Never Be Replaced

Professional OPINIONS have value that can never, repeat NEVER be replaced by automation… Earlier this week, George Dell‘s article titled “Why is Residential Appraisal in Trouble?” was published on AppraisersBlogs. Respectfully, George misses or misinterprets a few items. There has been zero evidence that an AVM produces credible approximations of MARKET VALUE consistently or with even an acceptable degree of variance. None. Like George indicates, an AVM is NOT an appraisal. By definition, it is not an appraisal. FIRREA required appraisal standards; NOT banking industry and TAF proposed alternatives. TAF is very far out of line giving AVMs any imprimatur...

AGA / Appraisal / Appraisal News / Appraisal Organizations / Appraisers News / Automated Valuation Models

March 24, 2020

Temporary Appraisal Requirement Flexibilities

Temporary Guidance From Fannie Mae… FNMA has issued temporary guidance on appraisal requirements, including allowing desktop & exterior-only appraisals… Folks, due to the ongoing COVID-19 national emergency, the GSE regulator FHFA and both GSE’s have issued new (temporary) guidance on Monday, March 23, 2020. These remain in effect through May 17, 2020, but could be extended due to the on-going situation. NOTE: I have seen nothing yet from FHA or VA. Appraisers (and AMCs) CANNOT modify assignments or reports without specific authorization from the lender client. Appraisers CAN choose to do, or not do, assignments under the inspection guidelines, and per directives...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisers News / Fannie Mae - Freddie Mac

December 23, 2019

Is That an Arm’s-Length Transaction?

USPAP does not define the term arm’s-length transaction. Fannie Mae also lacks such a definition. Yet, both of them call for the appraiser to use only arm’s-length transactions as comparable sales… How often do we appraisers get into the mode where we think we know it all? Occasionally, do we need to step back and look at the way we do things, just to make sure we are not missing something? Is what we know to be true and correct really true and correct? I raise this issue relative to the concept of what an arm’s-length transaction is. Are we...

Appraisal / Appraisal News / Appraisers News / Fannie Mae - Freddie Mac / Uniform Standards of Professional Appraisal Practice / USPAP

Incorrect Comments in Multi-Family Appraisal Report

December 19, 2019

Incorrect Comments in Multi-Family Report

I have in my possession an appraisal for a DUPLEX (2 family residence) on a FNMA 1025/FrMac 72 form, commonly called the ‘1025 Form’ which was done by a Certified Residential Appraiser licensed for 8 yrs, 6 months. Items “observed” in the report: UAD rating numbers are used for Quality and Condition. 1025 forms are not UAD coded, so why are these used? Please don’t tell me “the client said so” because the client is incorrect, and may not be aware. Use the standard wording for those items, and provide a definition description of the standard wording you use. The Highest and...

Appraisal / Appraisal News / Appraisers News / Fannie Mae - Freddie Mac / Trending / UAD

November 15, 2019

Data and Verification Sources Are Critical

The genesis for this essay began when I heard from another appraiser that a VA report reviewer rejected the comparables “DOC Number” on the Verification Source(s) line. The reviewer said the “DOC Number” was not acceptable as a Verification Source. In fact, VA has said in a newsletter to appraisers that “… Assessor’s File Number may never be used as a Verification Source.” I disagree with that position, and this essay explains why. It also explains what appraisers should do to provide credible Data and Verification Source(s) in reports. Caveat: I don’t do VA assignments. I decided that a deeper dive...

Appraisal / Appraisal News / Appraisers News / Fannie Mae - Freddie Mac / The US Department of Veterans Affairs / UAD

September 9, 2019

FNMA & FHLMC Bond Price Fixing Claims

Are the profits being reported by Fannie and Freddie being skewed because of price fixing? In an article released on CNBC by Reuters, US District Judge Jed Rakoff ruled investors can pursue antitrust claims against banks for conspiring to fix prices of bonds from Fannie Mae and Freddie Mac. According to the article, there are transcripts of chat room discussions that prove a conspiracy to price fix mortgage backed bonds from Fannie and Freddie between January 2009 and January 2016. Rakoff wrote. The chats unmistakably show traders, acting on behalf of those defendants, agreeing to fix prices at a specific level before...

AMC / Appraisal / Appraisal Management Companies / Appraisal News / Appraisal Organizations / Appraisers News

Hybrids, Invitation to Fraud - The New Subprime Fiasco of This Decade

June 13, 2019

Hybrid Appraisals, Invitation to Fraud

Until FNMA released their version of a test format for hybrids (1004P) there was not one hybrid form appraisal process and online form reporting system found that was not egregiously misleading in the entire country. Not one. Not Clarocity’s, nor Clear Capital’s or Mueller Inc. A “typical hybrid” sample follows. https://appraisersblogs.com/clearval-value-hybrid-appraisal Not those crafted in Hyderabad, Pakistan for $8 Billion for just one year’s Wall Street Investments (as published by Cezary Podkul Wall Street Journal) where the preparers claimed to be able to produce 360+ per day by illegally using broker login credentials from state-licensed brokers in America. The entire...

ACI / AGA / AMC / Appraisal / Appraisal Management Companies / Appraisal News

What Makes a Next Generation Home? - Appraisers Blogs

June 12, 2019

What is a Next Generation Home?

What makes a Next Generation home? Appraisers, both FNMA and FrMAC, in concert with manufactured housing builders and the Appraisal Institute, are promoting a new type of MANUFACTURED home, and CE classes to teach appraisers about them (and typical MFH). If your appraisal service area has manufactured homes, and you appraise them, you may want to peruse this essay. The name generically applied to these new manufactured homes is Next Generation (NG). Each GSE has a different name for their LENDING program, see below. Why is this happening? Up until relatively recently, the two GSE’s didn’t purchase manufactured home loans from...

Appraisal / Appraisal News / Appraisers News / Fannie Mae - Freddie Mac / Federal Housing Administration / FHA