Fannie Mae is Not Developing New Appraisal Forms

By Dustin Harris 

Excerpt: 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.

To read more, click here

My comments: Nothing much new, of course. I have been writing about Fannie Modernization in the monthly newsletter and this newsletter for a while. Last week’s weekly newsletter had a brief Fannie Update – mostly the new timeline to 2024.

I also hear that Fannie will require a lot more data with more time required to fill out the online “form.” I can’t wait until we don’t have to decide which form to use! Especially since some “reviewers” and AMCs don’t really understand this.

A good example is how Turbo Tax software works. Instead of looking at every part of your printed tax return, it only shows what is relevant. For example, if you are filing as a single person or married. A single person would not have to look at the single vs. married part of the return.

Appraisal Business Tips 

Humor for Appraisers

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NOTE: Please scroll down to read the other topics in this long blog post on unusual homes, crazy market now, adjustments, what fannie wants, mortgage origination stats, etc.


The Housing Market Has Become Like Carp Fighting to get through the Pymatuning Spillway

Excerpt: This fish phenomenon reminds me of the housing market today. There is a lot of demand out there, with very little inventory. As soon as homes hit the market, they often sell in days, with numerous offers that usually bid the list price up. Sometimes, the prices are bid up so high that they are out of the realm of what is supportable.

Within the past couple of weeks, I have appraised several properties for purchases, where my opinion of the market value of these homes was significantly below the contract price. It is notable that in all these cases, I did find comparable sales that clearly supported a much lower price than some of the prices these homes have been bid up to. Furthermore, I was not able to find a single comparable home selling anywhere in these neighborhoods, that offered support for what some of these homes were under contract…

There is a sense of despair out there right now. This year, it appears that buyer panic is even worse than last year. It may be due to inventory levels continuing to drop. There is just not much out there to buy…

To read more, click here

My comment: Worth reading. Anyone appraising homes in today’s market is having difficulties determining market value!!


Q1 2021 Washington Report Appraisal Institute

March 26, 2021

This report is mostly about what the AI is doing, letters to FHFA, etc. But there are some interesting topics, such as what states are doing: “State Legislative Sessions in High Gear; Numerous Valuation Issues Under Consideration”.

The legislatures in 46 states, the District of Columbia, Guam, the Northern Mariana Islands, and the U.S. Virgin Islands are now in session. The legislatures in Indiana, Utah, and Virginia have completed their work for the year, and the Louisiana legislature will convene on April 12.

To read more (scroll down the page to “In the States”), click here

My comment: Only the AI tracks the states for valuation issues. Very interesting!!Getting too many ad-only emails?


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2020 New Articles (Sample)

– But Fannie Mae says I don’t have to do the Cost Approach!!

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3 Spectacular Bridges. Beautiful treks, not for the faint of heart.

Just Something Very Different for a little Escape!!

Excerpt: Across the globe, lofted perilously over gorges, along cliffs, or through the canopies of dense jungles, are bridges that seem to defy both gravity and common sense. They challenge our concept of what is even possible.

Some are modern creations, designed to offer vistas of the surrounding landscape without compare. These marvels of engineering are also a draw for thrill-seekers, who seek out that sudden churn in the pit of their stomachs. However, many of these bridges are much older and offer a deeper insight into the societies and cultures that created them. In addition to dizzying views, they offer a deeper appreciation of the courage and ingenuity it took to construct them. From ancient Inca pathways that just barely hang on to the side of the Andes, to a glass bridge that “cracks” under visitors’ feet, these are 13 bridges that may require a light lunch when visiting.

Photo above is of Haohan Qiao — “Brave Men’s Bridge” Yueyang, China. At nearly 1,000 feet long, this glass suspension bridge is one of the longest in the world.

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To see more photos and info on the bridges, click the link below the foto.


What does Fannie Mae Want From Us Appraisers? Podcast 8.5 minutes

By Tim Andersen

Excerpts: What does Fannie Mae want? Among other demands, she wants the ability to measure risk. “What risk?!” you demand? It is no secret Fannie Mae has algorithms to provide her with a value opinion. She has this long before we turn in our appraisal reports. What she does not have, however, is boots-in-the-living-room. That’s why she hires us.

Our job is to look at the subject, in the context of the neighborhood, to tell her what’s going on. Is there new construction? Why? Are land uses changing? Why? Does demand well outpace supply? Why? Can the subject feasibly be modified to another use? Why? How soon? At what cost? Is the housing in the neighborhood affordable to the typical purchaser? Why?…

So, what does Fannie Mae want? She wants us to amass data, analyze it in the context of the risk of making a mortgage loan, so she can determine how risky any given loan is. We are her boots-in-the living-room, her eyes-in-the-neighborhood, her ears-to-the-ground. As we are, we are far more valuable than any AVM.

To read more, click here


How about “Loan Conditions”?

By George Dell

Excerpts:There are only three uses for knowing value: 1) collateral loss, 2) investment gain, 3) equitability.

Historical value may only be relevant to #3. Loss or gain of value only relate to future expectations. Investors and lenders should care about micro-forecast as well as macro-conditions.

Lenders need to estimate future value. Will it be enough to cover a ‘credit’ loss, (like a foreclosure)? Lenders need to consider two basic types of loss: 1) Individual borrower default and 2) Macro-economic conditions that cause a sea of defaults. Individual defaults are more or less an ongoing thing, and relatively easy to estimate loss into the risk/profit trade-off.

Macro-events risks are more difficult to estimate. Yet they seem to occur every 10-15 years. We seem always bewildered. How could this happen? What are we missing? Are we just blind? Are our systems, even our regulatory systems — biased to avoidance/ignorance of this recurring loss and societal damage?

To read more, click here


HOW TO USE THE NUMBERS BELOW. Appraisals are ordered after the loan application. These numbers tell you the future for the next few weeks. For more information on how they are compiled, go to Note: I publish a graph of this data every month in my paid monthly newsletter, Appraisal Today. For more information or get a FREE sample issue go to or send an email to . Or call 800-839-0227, MTW 7AM to noon, Pacific time.


Mortgage applications decreased 2.2 percent from one week earlier

WASHINGTON, D.C. (March 31, 2021) – Mortgage applications decreased 2.2 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending March 26, 2021.

The Market Composite Index, a measure of mortgage loan application volume, decreased 2.2 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 2 percent compared with the previous week. The Refinance Index decreased 3 percent from the previous week and was 32 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 2 percent from one week earlier. The unadjusted Purchase Index decreased 1 percent compared with the previous week and was 39 percent higher than the same week one year ago.

“After seven consecutive weeks of increasing mortgage rates, the 30-year fixed rate declined 3 basis points to 3.33 percent, which is still almost half a percentage point higher than the start of this year. Mortgage applications for refinances and home purchases both declined, but purchase activity was still convincingly higher than the pandemic-induced drop seen a year ago, as well as up 6 percent from the same week in March 2019,” said Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting. “Many prospective homebuyers this spring are feeling the effects of higher rates and rapidly accelerating home prices. Record-low inventory is pushing home-price growth at double the rate from a year ago, and even above the 10 percent growth rates seen in 2005. The housing market is in desperate need of more inventory to cool price growth and preserve affordability.”   

Added Kan, “Higher mortgage rates continue to shut down refinance activity, as the pool of borrowers who can benefit from a refinance further shrinks.”   

The refinance share of mortgage activity decreased to 60.6 percent of total applications from 60.9 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 3.4 percent of total applications.

The FHA share of total applications decreased to 11.3 percent from 11.7 percent the week prior. The VA share of total applications increased to 10.3 percent from 9.8 percent the week prior. The USDA share of total applications remained unchanged from 0.4 percent the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($548,250 or less) decreased to 3.33 percent from 3.36 percent, with points decreasing to 0.39 from 0.42 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $548,250) decreased to 3.34 percent from 3.40 percent, with points decreasing to 0.31 from 0.43 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 30-year fixed-rate mortgages backed by the FHA decreased to 3.29 percent from 3.35 percent, with points decreasing to 0.34 from 0.41 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 15-year fixed-rate mortgages decreased to 2.71 percent from 2.72 percent, with points decreasing to 0.33 from 0.40 (including the origination fee) for 80 percent LTV loans. The effective rate decreased from last week.

The average contract interest rate for 5/1 ARMs increased to 2.85 percent from 2.79 percent, with points decreasing to 0.40 from 0.44 (including the origination fee) for 80 percent LTV loans. The effective rate increased from last week.

The survey covers over 75 percent of all U.S. retail residential mortgage applications, and has been conducted weekly since 1990. Respondents include mortgage bankers, commercial banks and thrifts. Base period and value for all indexes is March 16, 1990=100.


Ann O’Rourke, MAI, SRA, MBA

Appraiser and Publisher Appraisal Today

1826 Clement Ave. Suite 203 Alameda, CA 94501

Phone 510-865-8041


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