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
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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!