Tuesday, December 30, 2014

The New Supervisor/Trainee Course

A very common question I hear lately is "are all supervisors and trainees required to take the new supervisor/trainee course?"

Drum roll please......the answer is no.

Anyone within an established supervisor/trainee relationship prior to January 1, 2015 does not need to take the course.  If, however, you create any new supervisor/trainee relationships after January 1, 2015, you will then have to take the new class.


Monday, December 29, 2014

Fannie Mae drops net and gross adjustment guidelines

So I was doing a little casual reading of the Fannie Mae Selling Guide ( I know.. I'm a sick puppy) and found a recent change that made my jaw drop.  Fannie Mae no longer has any guidelines with respect to net and gross adjustments.  So many of us residential appraisers were weaned on the 15% net and 25% gross adjustment guidelines.  Essentially these benchmarks were used to test the comparability of a sale used in the sales comparison approach.

If your adjustments were in excess of 15% net or 25% gross, you had better have an explanation that was approved by the Pope (and even then it may not be accepted by some underwriters.)

No more.

According to Section B4-1.3-09, updated 12/16/2014 "Fannie Mae does not have specific limitations or guidelines associated with net or gross adjustments."

However, this does not necessarily make the appraiser's job easier.

The section goes on to say "If the extent of the appraiser’s adjustments to the comparable sales is great enough to indicate that the property may not conform to the neighborhood, the underwriter must determine if the opinion of value is adequately supported.

The concern now is that rather than having clearly defined benchmarks for judging the sales comparability, it is now more open to interpretation (and possibly dispute) by the underwriter.  An underwriter could now question a sale with 15% gross if they had a mind to do so.

Lets hope good judgment wins out and that this relaxation of the guidelines results in more acceptance rather than more stipulations.