Fannie Mae Filed a Complaint Against Me

October 18, 2023

Excerpts: In June of 2021, I completed an appraisal for a conventional purchase. The appraisal was ordered by an AMC on behalf of a lender. At that time, the real estate market was still being wildly affected by the COVID pandemic. Remote work was in full swing, and consumers were desperately seeking to get out of the cities. Prices for all types of residential properties were rising rapidly, and this held especially true for niche properties that consumers believed would make a good short-term rental.

My subject was a mountain cabin, in reasonably close proximity to a National Park. This approximately 900sf, 1.5 story, 2-bed, 1-bath cabin was situated on a critically sloped 2.5 acres of wooded land. This is not unusual at all. Many similar properties exist, but they are spread across a wide area. The inspection was uneventful. I was given a lockbox combination and inspected the vacant home. It was unremarkable. A basic Q4, C3 home.

Five days after the report has been delivered, I received a revision request. The AMC stated that the lender indicated the appraisal received a high risk score by Fannie Mae. Fannie Mae provided two sales and two listing based on their “model”. In addition to the sales provided by Fannie Mae, I was asked to provide at least two better comps. As anyone who has been an appraiser for more than five seconds can attest, you use the best comps available. There were no “better comps” to be used.

In June of 2022, one year after completing the original appraisal report, I received an email from the AMC stating the lender had received a repurchase demand from Fannie Mae. The demand letter cited an accounting error during the origination of the loan (not an appraisal issue) and the appraisal as the reason for the buy back. This was the first time I had ever experienced this problem. None of their comments seemed to make any sense. I had a terrible time understanding why this appraisal was such a problem for Fannie Mae. I have attached the Fannie Mae comments and my responses below. I have redacted the areas that could reveal sensitive information.

To read more, plus appraiser comments, click here

My comments: I have heard that Fannie’s repurchase demands can trigger problems for the appraiser. The post is long. Be sure to read the Final Thought on the last page with a link to Jeremy Bagott’s always interesting analysis, “Insider: Fannie’s Loan Buyback Sophistry Relies on Modifying Analyst’s Behavior,” posted on October 13, 2023


SFR with ADU or Two Units?

Appraisal Business Tips 

Humor for Appraisers

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NOTE: Please scroll down to read the other topics in this long blog post Modular Homes Data Plates,  ADU income, Pickleball courts and other interesting home improvements,   , unusual homes, mortgage origination and more!


The Unique Mountain House in Nevada City, CA listed for $3.3 million

3 bedrooms, 2 baths, 2,281 sq.ft, built in 2008, 21.23 Acre lot

Situated in the foothills of the Sierra Nevadas, Mountain House stands as a testament to an architectural brilliance and a profound connection with nature.

Designed by the internationally renowned Japanese firm Atelier Bow-Wow, the property unfolds over 60 private, forested acres with the centerpiece – the meticulously designed and thoughtfully crafted residential structure settled into this lush land, bordered by the U.S. Forest Service on three sides.

The architects, celebrated for their intelligent and compact designs created a livable work of art as their first and only home built in the United States. Anchored in the heart of California’s Mother Lode, the property is the site of a 19th Century gold mine “Sailor Flat” which features wagon roads and trails from the 19th century, and is criss-crossed by year round creeks and seasonal streams.

To read more click here

My comment: Very interesting. Check out the photos.


Fannie Update on Manufactured Housing Data Plate

Currently, our policy on manufactured housing requires both the HUD Data Plate and HUD Certification Label information be

provided in the appraisal report along with photo exhibits, if available. With this policy update, only one of the two will be required.


▪ If only one of these is available to the appraiser, that will satisfy compliance with the Selling Guide. (Note that this applies to each section of the home.)

▪ If neither are available, the lender must obtain either a Label Verification Letter with the HUD Certification Label(s)

information or duplicate HUD Data Plate/Compliance Certificate from the Institute for Building Technology and Safety.

The lender may also contact the In-Plant Primary Inspection Agency or the manufacturer for the HUD Data Plate


Note: This update does not apply to newly constructed manufactured homes because these items must be present on all new units.

Effective: Lenders may take advantage of this policy update immediately

To read the full update document, click here

My comments: The link is to a much longer update. I included all the information here on the Data Plate. Scroll down the page to read it in the original document.Business slow? What are the best non-lender appraisals for you?


You know how to appraise. Many non-lender appraisals are easier than AMC appraisals with low fees and hassles.

Not all non-lender appraisals require a long time marketing to real estate agents. Some use postal mailings or office visits, such as you did in the mortgage broker days. I give you the details on how to do them and lots of marketing tips.

Google Business Profiles are free and easy to set up. Get on the top of Internet searches. I tell you how to set one up.

I have been doing non-lender appraisals since I started my appraisal business in 1986.

If these articles helped you get one non-lender appraisal, it is worth the subscription price!


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Zillow 2024 Home Trends: What’s a Pickleball Court Worth, Anyway?

Zillow has unveiled its data-driven predictions for the features and design elements poised to transform homes and dominate social media feeds in 2024. From the raw appeal of brutalist design to the delicate artistry of Murano glass chandeliers, these emerging home trends highlight new post-pandemic pastimes and a nostalgia for the design of decades past.

To discern these trends, Zillow looked at nearly 300 home features and design styles mentioned in for-sale listing descriptions, then identified the keywords showing up far more frequently than a year ago.

“When certain keywords appear in a rising share of listings, it’s a signal that today’s home buyers may be gravitating toward those features,” said Amanda Pendleton, Zillow’s Home Trends Expert. “Real estate agents are uniquely attuned to subtle changes in what buyers want, and they often get a first look at the latest and greatest features going into newly built homes. Savvy listing agents will highlight those trending, in-demand features when marketing a home for sale.”

Game on! This fast-paced paddle sport is becoming a sought-after amenity in backyards and neighborhoods. In New York City, Zillow brand StreetEasy is seeing a 100% increase in the share of for-sale listings highlighting a home’s proximity to public or private pickleball courts. Nationwide, pickleball mentions are up 64% on Zillow compared to last year.

To read more, click here

My comments: I started playing pickleball 8 years ago and have played regularly since then. Our local senior center first offered classes 8 years ago. I currently play 3 times a week. We need more courts. Warning: it can be addictive! Of course, I had to include this link


FHA Amends Policy on Accessory Dwelling Units – Can count rental income

The U.S. Department of Housing and Urban Development (HUD), through the Federal Housing Administration (FHA), has announced a new policy which allows lenders to count income from small units of housing built inside, attached to, or on the same property as a primary residence (Accessory Dwelling Units [ADU]) when underwriting a mortgage.

Include ADU-specific appraisal requirements for appraisers to clearly identify, analyze, and report on ADU characteristics and the estimated rent the ADU can be expected to generate. The guidance provided in the Mortgagee Letter will assist appraisers to more accurately determine the market value of a property with an ADU and also will help advance the maturation of ADU valuation, thereby increasing access to ADU financing as more cities and states remove zoning barriers.

The change in policy allows for the inclusion of rental income from the ADU in the borrower’s qualifying income, and would allow more borrowers to qualify for FHA financing for properties with ADUs, including 203(k) rehabilitation mortgages. ADUs can be rented out to tenants, thereby adding to the supply of housing in a community.

In addition, this new policy will enable more first-time homebuyers, seniors, and inter-generational families to leverage the power of ADUs to enhance the generational wealth building potential of homeownership.

To read more, click here

To read the FHA official press release, dated 10-12-23 click here

My comment: Sounds like a good idea.


Norman Lykes House Designed by Frank Lloyd Wright in Phoenix, AZ

Designed to blend in with the curves of the surrounding desert mountain, this iconic masterpiece is the last home designed by Frank Lloyd Wright and one of only fourteen circular homes by the master architect. Overlapping concentric circles create a floorplan that flows seamlessly from one room to another while every room takes in unobstructed majestic views of Palm Canyon and the city below.

$1,495 per night on Airbnb

To read more, click here

For a video of Norman Lykes House click here Short, well done video. Worth watching.


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, click here.

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 go to Or call 510-865-8041, MTW, 7 AM to noon, Pacific time.

My comments: Rates are going up and down. Many appraisers are not busy. Some are busy, usually with non-lender appraisals.


Mortgage applications decreased 6.9 percent from one week earlier

WASHINGTON, D.C. (October 18, 2023) — Mortgage applications decreased 6.9 percent from one week earlier, according to data from the Mortgage Bankers Association’s (MBA) Weekly Mortgage Applications Survey for the week ending October 13, 2023.

The Market Composite Index, a measure of mortgage loan application volume, decreased 6.9 percent on a seasonally adjusted basis from one week earlier. On an unadjusted basis, the Index decreased 7 percent compared with the previous week. The Refinance Index decreased 10 percent from the previous week and was 12 percent lower than the same week one year ago. The seasonally adjusted Purchase Index decreased 6 percent from one week earlier. The unadjusted Purchase Index decreased 5 percent compared with the previous week and was 21 percent lower than the same week one year ago.

“Applications decreased to their lowest level since 1995, as the 30-year fixed mortgage rate increased for the sixth consecutive week to 7.70 percent – the highest level since November 2000,” said Joel Kan, MBA’s Vice President and Deputy Chief Economist. “Both purchase and refinance applications declined, driven by larger drops for conventional applications. Purchase applications were 21 percent lower than the same week last year, as homebuying activity continues to pull back given reduced purchasing power from higher rates and the ongoing lack of available inventory. The ARM share was 9.3 percent, the highest share in 11 months, as some borrowers look for alternative ways to lower their monthly payments. Refinance activity was at its lowest level since early 2023. There is very limited refinance incentive with mortgage rates at multi-decade highs.”

The refinance share of mortgage activity decreased to 30.5 percent of total applications from 31.6 percent the previous week. The adjustable-rate mortgage (ARM) share of activity increased to 9.3 percent of total applications.

The FHA share of total applications increased to 14.8 percent from 14.4 percent the week prior. The VA share of total applications increased to 10.7 percent from 10.2 percent the week prior. The USDA share of total applications remained unchanged at 0.5 percent from the week prior.

The average contract interest rate for 30-year fixed-rate mortgages with conforming loan balances ($726,200 or less) increased to 7.70 percent from 7.67 percent, with points decreasing to 0.71 from 0.75 (including the origination fee) for 80 percent loan-to-value ratio (LTV) loans. The effective rate increased from last week.

The average contract interest rate for 30-year fixed-rate mortgages with jumbo loan balances (greater than $726,200) decreased to 7.56 percent from 7.70 percent, with points increasing to 0.85 from 0.57 (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 7.36 percent from 7.40 percent, with points decreasing to 1.02 from 1.08 (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 increased to 6.98 percent from 6.97 percent, with points decreasing to 1.04 from 1.18 (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 6.52 percent from 6.33 percent, with points increasing to 1.50 from 0.90 (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.

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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