Appraisers' Free Forum

I am interested in the varying opinions about how much skill it requires to fill in the Fannie forms in such a manner as to satisfactorily pass the guideline scrutiny.

How much of that ability does a legitimate appraiser need? Is that ability one of the things that appraisal schools should be teaching?

I have heard it said that, with work, anything can pass Fannie muster. Who agrees with that and why?

Based on your experience what % of assignments do you think are actually qualified for Fannie purchase?

Warning. I am not pre-disposed at the moment in favor of selling every SFR mortgage to Fannie, although I do think it that the idea of the secondary market makes good economic sense only because I don't have any other idea where the money would come from for borrowers to buy homes.

I am inclined to apply the moniker form-filler-Fannie-fitter to SFR mortgage appraisers right now, and I'm sure that is less than flattering.

Edd Gillespie wrote:I am interested in the varying opinions about how much skill it requires to fill in the Fannie forms in such a manner as to satisfactorily pass the guideline scrutiny.

It takes almost zero skill to fill in the forms. I could train an intelligent Monkey to do it... wait, since they came out with the new forms, it would probably take at least a smart Chimp. On the other hand, it takes a great deal of skill to appraise the property. Shcools should conentrate on economics, statistics, geometry, business communications, etc., etc. and spend two hours on the "form."

Steve Owen wrote:

Edd Gillespie wrote:I am interested in the varying opinions about how much skill it requires to fill in the Fannie forms in such a manner as to satisfactorily pass the guideline scrutiny.

It takes almost zero skill to fill in the forms. I could train an intelligent Monkey to do it... wait, since they came out with the new forms, it would probably take at least a smart Chimp. On the other hand, it takes a great deal of skill to appraise the property. Shcools should conentrate on economics, statistics, geometry, business communications, etc., etc. and spend two hours on the "form."

I have to agree with Steve on this aspect. In fact, the schools, at least here, teach the exam, much like the broker schools do here. That kind of crap needs to stop.

The schools should, on top of what Steve referenced, teach the law of the state, the reasons behind all this, the actual analysis process and how to read "relietoreze" so that they understand the fact that it's not a "cream puff" (not really but not a bad idea).

"I am inclined to apply the moniker form-filler-Fannie-fitter to SFR mortgage appraisers right now, and I'm sure that is less than flattering."

What about brevity is the soul of wit? Anyone can be a windbag. It takes quite a bit of skill to summarize efficiently. Bloated code isn't only a problem for most software vendors. Baffling with bullshit generally works better with expanded narrative.

I've done both forms and narratives. Even did a couple of oral reports with backing workfiles.

All are prone to bullshit and canned comments. To do any of them well takes skill.

Well actually I meant to contrast rather than compare forms and narratives. Bull shit and boiler plate aside, I find that there is insufficient room to explain these markets in a form, even with addenda, and that the people reading them are prone to require rote to understand. The forms appear simple and may for that reason alone, encourage lower quality, but my real concern is that there are complex SFRs and difficult SFR markets that simply cannot be explained in check box, and trying to explain it in the brevity of the form creates an erroneous impression and may be misleading.

Some markets I work in simply have insufficient access to data or no data with which to support checking a box, but there is not a "no data" box to check, yet the AMCs seem to insist the boxes must, without exception, be checked.

There is more, like pre-printed, boiler plate in the forms, but we've hashed that to no avail. So address for me how any and every SFR can be crammed onto a URAR.

"Satisfactorily pass the guideline scrutiny" is just another name for form-filler. Why not just do an appraisal and let the chips fall where they may?

If you really want to know what will pass Fannie Mae muster why not follow their Selling Guide? Or better yet walk off into the lion's den, monitor your local NAMA/MU or MBA organizations and attend their workshops presented by Fannie Mae personnel.

I think the last one I attended was Underwriting Rural Properties, ie: 100+ acre sites, nearest comp 50 miles away, and only one comp selling within the past 18 months. Would you have even accepted this assignment knowing it may wind up in Fannie Mae's hands? I certainly would not have, but I will now.

When you get the weird or problemed property drop anchor, call the underwriter, heck call Fannie Mae.

One point of clarification, when I refer to the underwriter I am not talking about a phone clerk at an AMC or a dealmaker. I am referring to one who rides herd as if it was their own personal money being lent.

Edd Gillespie wrote:.... So address for me how any and every SFR can be crammed onto a URAR.

They can't be.

I live in a fairly normal area and I'd venture that 95% of the SFR properties here would do just fine on a form.

Some will require lengthy addendum and a few extra lame comps and comments to accommodate the hardcore guidliners out there. I'm ok with that as long as the report is accurate and not misleading. The skill comes in doing that and painting a clear picture while still keeping the ding-dongs quiet.

For the most part, I see the guidelines as generally beneficial and at least a minor obstacle to Skippy in SFR mortgage work.

The other 5% just will not happen. Unless of course one ignores a whole bunch of factors in order to fit the guidelines. Happens all the time. sigh.

Edd Gillespie wrote:I am interested in the varying opinions about how much skill it requires to fill in the Fannie forms in such a manner as to satisfactorily pass the guideline scrutiny.

That really depends on the lenders and UWs. So many order a SUMMARY report, then want correction after correction on multiple addendum. So what started as a summary is now getting close to self contained. The odd ball ones do take more skill, and experience, to understand what would be an appropriate substitute and comparable. When dealing with REO, the level of difficulty raises again. You've got to have some understanding of construction to estimate repairs.

How much of that ability does a legitimate appraiser need? Is that ability one of the things that appraisal schools should be teaching?

I don't know how a school could, that would take years. That is what a mentor is for... or supposed to be for.

I have heard it said that, with work, anything can pass Fannie muster. Who agrees with that and why?

Sure... if you lie. If the property is older, in need of repairs, or unusual, a seasoned vet knows how to pull off the "Effective Age" thing well, as well as using the angle of the sun to make all the comp photos seem to equal average condition.

Based on your experience what % of assignments do you think are actually qualified for Fannie purchase?

Probably half. I deal with a lot of weird stuff, and of course high $$$$$$ lake homes.

I am inclined to apply the moniker form-filler-Fannie-fitter to SFR mortgage appraisers right now, and I'm sure that is less than flattering.

I see it more as a description of attitude than a dig on level of education. Residential appraisers have Fannie/Freddie pound into their heads, and more often than not will confuse the Guidelines with Requirements and USPAP. For example, the same old argument on comp photos... not required by the rules, but is something that is required if using Fannie forms. Comparables selection... in another forum, a residential licensed appraiser tried to ream me a new one for saying it's okay to use a triplex comp for a duplex. I tried to explain the logic, but he couldn't turn off his "form brain" to comprehend a value on a per unit basis rather than a per SqFt. I also tried to explain a Qualitative Analysis rather than a Quantitative. When it's not for Fannie, USPAP is your only rule. Like I've said many times, one of the hardest things for me to do was to deprogram my own mind away from the Fannie rules. Losing the "form brain" take practice and a good mentor.

Edd Gillespie wrote:The forms appear simple and may for that reason alone, encourage lower quality...

Bingo!

Edd, I do not believe you can fully explore the question without looking at the difference between narrative and form reporting... and more specifically, summary report formats vs. self-contained. While it is true that you cannot fully explain a complex market situation with a check box, I would submit that if a summarized version of your thinking is not sufficient, then a self-contained report format is in order.

anything can pass Fannie muster

I think quite the opposite.

Not that fannie does not allow banks to sell them these loans. I suspect they are sizing up the lenders not the mortgages that back the securities they buy.

What I mean is this. You do the report (good, bad, indifferent) and the UW for the bank is trying to get past Fannie's UWs and therefore, is testing you with additional requests, etc. How pliable are you? If you are not, then they know they have to keep a lot of loans or sell to someone else. You get the dumper roo. If the buzz words are there, the bank is happy. They flip the loan in a package to Fannie..

Fannie is perfectly happy knowing that if the package turns out to be a turkey, they simply do a forensic review and declare a substantial number of the appraisals null and void.. THAT'S EXACTLY WHAT THEY WANT TO DO. They want to make the bank eat the loans. Of course, a lot of those banks, Like CW, cannot eat anymore. They are full. They take one more bite and they explode.

If the appraisals were bullet proof, then fannie could not make the banks buy them back. But they created the forms and they created the landmines in those forms to assure that 100% of all appraisals can be spit back in the face of the bank that bundled them up and sold them to fannie.

It takes no skill to clone or copy/paste.

My appraisals are most often long on research, short on reporting. I'll bet I could be more efficient if I did it the other way around.

Joker wrote:It takes no skill to clone or copy/paste.

My appraisals are most often long on research, short on reporting. I'll bet I could be more efficient if I did it the other way around.

Somehow your arrangement seems copacetic to me. But tell me, how can the rest of the profession and the clients be persuaded? The profession has a legacy of selling appraisals by the pound and to a certain extent mine's bigger and steeped in esoteric language that may defy any meaning has become the standard that is expected and admired, to say nothing of totally entrenched.

I am not sure how to convince everyone else and frankly, I don't care to. It is a matter of selling yourself to the client. I know more about a property before I even bid on it than some other appraisers may know after having done the appraisal. My clients know this. When I submit my bid, I tell the client all I know about the property as well as how long it will take and how much it will cost. I also tell them what I will be doing in those days/weeks. It makes them feel better about paying $2,000 for a 30-50 page report.

I have informed my clients that the report is a brief summary of what I have done in developing an appraisal. They are ok with it as it doesn't bore them and they understand what is written. They don't like charts, graphs, and statistics. They do like pictures and important things in bold print. Other clients may react differently. This works for me.

Walker,

30 to 50 pages was homework in law school! I got news for you, that ain't short by my measures. A summary should be the Cliff notes or Reader's Digest version. Make it shorter and let those 50 pager guys brag on the mine's bigger.