FHA & Declining Markets

By
Real Estate Agent with RE/MAX Fine Properties

Well, like my mother used to say, if you don't have anything good to say, then don't say anything.  So....for those of you watching my post.......I have been very quiet.  The media seems to say enough for all of us!

Anyway, in the interest of keeping everyone informed, just when I was grasping the new HVCC and the 1004MC form, then HUD goes and adds more to the "mix"

Hidden in Mortgagee Letter (ML) 2009-09 - dated 3/23/09 regarding HUD's adoption of the 1004MC Form, HUD explaines how they want their appraisals completed if the subject is in a declining market.  It is important to note that the new 1004MC offers insight and guidance to lenders and how the appraiser supports his or her interpretation of the subject property being in a declining market.  Here are the changes an appraiser must now start focusing on when completing an FHA appraisal in a declining market:

*Must have at least 2 comparable sales that have closed within the past 90 days.  If this is not possible, then the appraiser MUST explain this lack of recent data.

*Must include a minimum of 2 active and/or pending listings in the sales grid.

*The appraiser is to insure that the active listings and/or pending sales have been exposed to the market for a reasonable period to avoid over-priced indicators.

*Active listings MUST be adjusted for typical list-to-sale price ratios for the market.

*Include the original list price, revised list prices and dates, and total days on market for all listings used.

*Reconcile all comparable's closed sales, pending sales, and active listings.  If the active listings and pending sales adjust out lower than the closed sales, the appraiser should consider time adjustments to the comparable sales.

and finally...

*All data from the local MLS must be verified by a second source (this has always been required)

And.......you wonder why it takes us sooooo long to get our appraisal orders done?!?!

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My first video - the hardest thing I have ever done!   I think it aged me about 10 years!!

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Rainer
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Dusty Rhoton SRS, MRES, ABR, SRES, GRI

Flagstaff Real Estate
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