Answers to your Fannie Mae 1004MC questions

The learning curve for the new 1004MC Market Conditions Addendum could be steep for some.

In an exclusive Q&A with Valuation Review, McKissock USPAP Instructor Tracy Martin explained the challenges appraisers will face in completing the analyses, what she’s hearing about clients possibly paying higher fees as a result of the form and her thoughts on whether the 1004MC will solve the primary problem: that too few residential appraisers are able to provide the level of detail needed for clients to understand neighborhood/market trends.

Here’s an excerpt:

What should appraisers know about any possible liabilities from the form?

In my opinion, the greater liability lies in not being able to support opinions and conclusions. In the case of the 1004MC, the liability will increase in direct proportion to the appraiser’s inability to research, analyze and interpret market data.

And, while this may not be a liability, per se, I cringe at the thought of the inevitable questions from underwriters who do not understand the form posed to appraisers who do not understand the form.

What other tips or advice can you share with appraisers regarding the form?

Don’t wait for continuing education classes. Make every effort to become proficient with a spreadsheet program. Learn how to incorporate MLS data into Excel (or some other spreadsheet program). Learn how to create charts, graphs and tables.

Maintain a master database, rather than bury the data in individual work files. Re-inventing the wheel for every assignment is counter-productive.

The master database should be built upon, that is, new data added, on a periodic basis – weekly, monthly, quarterly. The frequency of the addition of data should reflect that dynamics of the market. For rapidly changing markets, weekly input would enable the appraiser to identify trends and/or changes “at the drop of a hat.” For more stable markets, monthly or quarterly input would probably suffice.

You can read the full article at

Also, don’t miss the upcoming Mastering the 1004MC Webinar.


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