Fannie Mae is Not Developing New Appraisal Forms

Despite what rumors you may have heard, Fannie Mae is not coming out with any new appraisal forms.  Of course, I am playing with you a bit; they are coming out with a new portal of course – just not new forms.  

If you have not heard yet, FNMA is in the process (some say it is mostly finished) of developing a whole new way to complete Section 2 of USPAP – the reporting side.  The way we as valuation professionals collect and analyze markets and data is not changing, but the old days of the 1004 may soon be in the past.  

Some of my colleagues have asked me, “What will the new forms look like?”  Again, and I know it is a bit nit-picky, but there are no new forms.  Rather, the GSEs are developing a cloud-based electronic container that will be used to report our findings rather than filling out a form and sending it in.  Weird, I know, but it has its positives.  

Currently, an appraiser needs to determine the proper scope of work to know which form is best for the situation.  If it is a condo, it is likely a 1073.  Single family residence, a 1004 or 2055.  Small income? Well, a 1025 will probably do the trick.  The new system will be a one-stop shop for all residential appraisal needs.  Rather than choosing the form and filling it out, you will start putting data in the system and it will open up the needed sections for you.  If there is no need for a full cost approach, for example, that section will not be shown.  No basement?  No basement questions (such as percentage finish) will be seen.  The subject has an ADU?  Great, the ADU questions will be asked and answered.  Think of it kind of like Turbo Tax for appraisers.  You will answer a series of questions and the system will give the appropriate additional sections based on your answers.  

What will this do to form-filling software companies?  Word on the street is, not much.  They will still be around assisting appraisers to use the new system more efficiently.  I am told major appraisal software companies are scrambling and retooling for this change.  Besides, private appraisals are not going away.  There will still be a need there.  

How will we handle narrative and reconciliation?  I am told there will still be space to explain why we did what we did.  That is not going away.  We are not just clicking boxes and filling out small capacity fields.  Your expert opinions are still needed.  As far as your workfile goes, you will be able to “print and save” your work into your digital workfile for safe keeping.  

Is this change a good thing?  It probably depends on your point of view.  I always believe change can be hard, but brings opportunity.  I assume most of us will adapt, and some will decide this is the straw that broke the proverbial camel’s back and decide it is time to retire.  I have seen the new system (at least a beginning prototype) and it is pretty amazing.  Different for sure. 

10 Comments on “Fannie Mae is Not Developing New Appraisal Forms”

  1. Pingback: Fannie Mae is Not Developing New Appraisal Forms - Appraisal Buzz

  2. I think just about all appraisers use a template and/or have outside services assisting in typing their forms. As this
    has evolved over the last few years, i would hope the new system would be able to accomodate their services.

  3. I’ll continue to use the 1004 and develop my report and then enter it into their system. Reports are developed and reported, not simply just typed into a program. Therefore, this could be good or a disaster waiting to happen.

  4. Thank you for knowing something on this. I fear that if there is no room for merge or template will make this time consuming. Box checking through every field in every report could be maddening. It sounds as though this portal will be cloud based, correct?

  5. I agree with Tyler, if you have assistants that do the “form filling”, how will this be done. Can they put the info in that they are capable of doing and then the appraiser go in and finish the report up? I guess we must be doing a poor job, everyone from Fannie to the lenders seems to think they can do our job better. Why don’t we go to their offices and change things out and see how that works out.

  6. I cannot stand forms. I wish all appraisals were narrative. Filling forms is a distraction from telling the story of what factors are most influencing a property’s value. Appraisers and bank reviewers have become more interested in the fields being filled out than what is really important to that particular property. Hopefully the new portal is an improvement, but I’m concerned it is not.

  7. This sounds like the beginning to the end. I have been an appraiser most of my career before computers and licensing. Yes, ok I was an appraiser trainee in 1988. Ouch.

    Ironically I feel what we do half the time is an exercise in sillyness and a waste of time. What I mean for example is that I recently completed a high dollar appraisal for around the 5 Million range . I spend a good amount of time on this . I actually had lots of good comps. So, I send it in and a week goes by and the reviewer comes back and with some insignificant silly stuff . Comp 1 has an half bath in the basement but I indicated it has 1 full bath. Comp 2 indicates it has 6 baths but you indicated it has 5 baths . Well one of the MLS bath was the pool cabana . A few other other BS items which are insignificant and considering that the homeowner was getting a $750000 loan and owned the house free and clear .

    So I spend about 10 hours on this report The reviewer probably spend 3 hours going over every line because they don’t trust any appraiser . The underwriter probably spend about hour reviewing it and after it finds don’t forget the post funding reviews from Fannie Mae and others . My god . What a waste of time
    And who the heck cares what condition the window screens are in. Regardless I got a good fee and I had a great idea what the value was in about 30
    Minutes before I even did the inspection

  8. How are these FNMA changes tied to the newly proposed changes that the Foundation is working on? …..I understand they are working on a similar ‘dynamic’ form which will allow the appraiser to move through the report answering questions, and the form will change… open or close fields based on the answers….no basement – no basement fields, or ADU present – new field will pop up with more ADU questions.

  9. Any form or process development that potentially pulls the appraisal back to the appraiser is a win for public trust. Lets hope the days of underground outsourcing to friends, family, kids, or 3rd world countries will become a thing of the past. Churning out 4 to 9 appraisals a day might make you an all-star, but principles before profits is not the answer.

    Seek the truth.

  10. Pingback: Despite what rumors you may have… – The Hypocrilist

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