The Crosstown Blog

Appraisal Insider: Fanne Mae's 08-30 "Change Has Come" for Appraisers
November 17th, 2008 3:44 PM

Last Friday FNMA released Announcement 08-30, which outlined several changes in the way appraisals are to be prepared for mortgage lending purposes. 

The most impactful for appraisers will be the introduction of a new page into the appraisal, called a 1004MC.  This page is intedended to expand on the appraiser's Market Area Analysis.  It seems too often that all of the Neighborhood check boxes are nicely crossed down the middle, and the subject's appraised value is always conveniently near the predominant neighborhood value.  The Boundaries and Description comments are always the same for every appraisal, with the fill-in-the-blanks for streets, cities and school districts changed for the appraisal.  This is one of many reasons appraisers are always under FNMA's microscope, and I don't blame them.

FNMA has now created a whole page devoted to this topic which is usually hurried and completed with indifference by the appraiser.  Ultimately, the goal of this and some other 08-30 revisions are the same as in 2005 when the "new" appraisal forms were released: To make the appraiser do the job they were already supposed to be doing.  Instead of having their readers just take their check-boxed conclusions at face value, appraisers will now have to show their statistical analysis that lead to their conclusions.  I have already been doing this since July 2007, when FNMA started tracking declining markets for themselves and comparing against the appraiser's conclusions.    

Other changes in the Announcement:

  • Supervisory appraisers must actually inspect the subject property
  • Lenders must provide the sales contract to the appraiser
  • Changes in repair escrows between major and minor repairs
  • Entire acreage must be appraised, not just a portion of the whole
  • The HUD-1 of builder-provided comparables must be available
  • Lenders may rely on the "Replacement Value" of the Cost Approach for insurance purposes

The policy changes take effect January 1, 2009; implementation of the 1004MC is April 1, 2009.  See the Announcment here

Wishing you a better 2009!

Clay Bonner - Crosstown Appraisals


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Posted by Clay Bonner on November 17th, 2008 3:44 PMPost a Comment

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