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15 HOURS NATIONAL USPAP FINAL EXAM CHAPTERS 1-
11 WITH ALL POSSIBLE QUESTIONS AND VERIFIED
CORRECT ANSWERS RATED A+
USPAP is written, amended, and interpreted by the: Appraisal Standards Board (ASB) Advisory Opinions are best described as not part of USPAP, but included as reference material Note: The ASC has seven members, each appointed by the head of his or her agency. The members represent: Board of Governors of the Federal Reserve System (FRB) Office of the Comptroller of the Currency (OCC) Federal Deposit Insurance Corporation (FDIC) National Credit Union Administration (NCUA) Department of Housing and Urban Development (HUD) Federal Housing Finance Agency (FHFA) Consumer Financial Protection Bureau (CFPB) Note: The ASC has seven members, each appointed by the head of his or her agency. The members represent: Board of Governors of the Federal Reserve System (FRB) Office of the Comptroller of the Currency (OCC) Federal Deposit Insurance Corporation (FDIC) National Credit Union Administration (NCUA) Department of Housing and Urban Development (HUD) Federal Housing Finance Agency (FHFA) Consumer Financial Protection Bureau (CFPB)
Which of these is considered an integral part of USPAP and has the same weight as the components they address? USPAP Q&As Comments USPAP FAQs Advisory Opinions Comments Which part of USPAP establishes the requirements for workfile content for an appraisal or appraisal review assignment? Record keeping rule Why are USPAP Advisory Opinions issued? offer advice Note: In USPAP, the appraisal process is divided into two distinct types of activity: development and reporting. The development process begins with information identified in Step 1. The appraiser gathers most of this information from the client, with the exception of relevant property characteristics, which are often obtained later by the appraiser through inspection of the property or other means. The appraiser uses the initial information in Step 1, such as identification of the client and other intended users, intended use, and type of value, etc., to determine what assignment conditions (e.g., extraordinary assumptions and hypothetical conditions, jurisdictional exceptions, assumptions and limiting conditions) may be required. With this information, the competent appraiser can determine the scope of work (Step 2) necessary to develop a credible solution to the problem. Later, in Step 6, the appraiser will determine how much
USPAP is enforced by: Appraisal Standards Board (ASB) Appraisal Subcommittee (ASC) The Federal Financial Institutions Examination Council (FFIEC) State appraiser licensing/certification agencies State appraiser licensing/certification agencies Who is responsible for issuing credentials to individual appraisers? Appraisal Subcommittee (ASC) State appraisal regulatory agencies Appraisal Practices Board (APB) Appraiser Qualifications Board (AQB) Time left to answer: 11 State appraisal regulatory agencies Which entity maintains the official National Registry of state-certified and licensed appraisers? Appraiser Qualifications Board (AQB) Appraisal Subcommittee (ASC) Federal Reserve Board (FRB) Appraisal Standards Board (ASB) Appraisal Subcommittee (ASC) note: The PREAMBLE identifies the purpose of USPAP: To promote and maintain a high level of public trust in professional appraisal practice To establish minimum requirements for professional appraisal practice
note: The PREAMBLE also establishes what appraisal services are covered by USPAP: Appraisal Appraisal review Other services when choosing to represent oneself as an appraiser note: The PREAMBLE also states that USPAP is intended to benefit: Providers of appraisal services (appraisers); and Users of appraisal services note: the PREAMBLE addresses who must comply with USPAP and who should comply with USPAP. An individual must comply with USPAP when required by law, regulation, or agreement (with the client or other intended users). An individual should comply with USPAP when choosing to represent oneself as an appraiser. When obligated by law or regulation, an appraiser _______ comply with USPAP. Must Need not Should May choose to must
APPRAISAL PRACTICE,
note: Appraisal practice is a subset of the broader concept of valuation service. note: Acting as an appraiser or performing a service "as an appraiser" means: Representing oneself as an appraiser An expectation of appraisal competence in the service being provided note: An expectation for an individual to act as an appraiser indicates an obligation to comply with USPAP to: Maintain public trust Provide services in a manner consistent with the definition of "Appraiser" Meet expectations of clients and other intended users when an appraiser is identified When an appraiser provides an opinion about the quality of another appraiser's work that was performed as part of an appraisal or appraisal review assignment, the appraiser must also comply with the SCOPE OF WORK RULE, the RECORD KEEPING RULE, and applicable portions of STANDARDS ____ and ___. 3 and 4 A valuation service that is premised upon advocacy:
- Is an appraisal review assignment under STANDARDS 3 and 4
- Can be performed by an individual acting as an appraiser with appropriate disclosure
- It cannot be performed by an individual acting as an appraiser
- Must be performed under the SCOPE OF WORK RULE It cannot be performed by an individual acting as an appraiser
USPAP states that in a situation when an individual is not required by law, regulation, or agreement to comply with USPAP:
- Compliance does not matter because clients do not understand USPAP
- The individual should still comply when he or she is acting as an appraiser
- The individual should comply only if the service involves real property
- The Appraisal Foundation can still force compliance
- The individual should still comply when he or she is acting as an appraiser When performing valuation services outside of appraisal practice, an individual must be careful not to __________ the client and other intended users about his or her role.
- Communicate with
- Mislead
- Identify
- Mislead NOTE: This concludes Chapter 2. Below is a brief summary of this chapter. In this chapter, we addressed the PREAMBLE and when USPAP applies. The PREAMBLE sets forth the purpose of USPAP, which is to promote and maintain a high level of public trust in appraisal practice. We discussed when USPAP compliance is required. An appraiser must comply with USPAP when required by law, regulation, or agreement with the client or intended users to comply.
An appraiser, by definition, must perform independently, impartially, and objectively, without accommodation of his or her own personal interests. Bias would preclude an individual from acting within the definition of appraiser. A preference or inclination that precludes an appraiser's impartiality, independence, or objectivity is: Bias Appraisal practice Assumption Market value Bias An appraiser is permitted to be biased when performing an appraisal, as long as the bias is properly disclosed. True False False The word assumption is not defined in USPAP, as its plain English definition suffices. True/False True Note: Hypothetical condition: These are typically "what if" scenarios for the purposes of analysis. What if the zoning were different? What if the building was already renovated?
A hypothetical condition is used when a property is appraised contrary to its current known condition. If an appraiser assumes a condition to be true that does not exist for the purposes of analysis, this is an example of: An extraordinary assumption A limiting condition A hypothetical condition An assumption A hypothetical condition Note: EXPOSURE TIME: an opinion, based on supporting market data, of the length of time that the property interest being appraised would have been offered on the market prior to the hypothetical consummation of a sale at market value on the effective date of the appraisal. Exposure time always occurs prior to the effective date of the appraisal. It is an opinion, developed by the appraiser, based on an analysis of past events and assumes a competitive and open market. Exposure time is different for various types of property and under various market conditions. Exposure time is not synonymous with marketing time. Exposure time is a component of most market value definitions, and it may also be a component of other types of value as well. Note: COST: the actual or estimated amount required to create, reproduce, replace or obtain a property.
Value Price Cost Price "The monetary relationship between properties and those who buy, sell or use those properties" is the definition of: Value Price Cost Value Note: CLIENT: the party or parties (i.e., individual, group, or entity) who engage an appraiser by employment or contract in a specific assignment, whether directly or through an agent. The client may be an individual, group, or entity, and may engage and communicate with the appraiser directly or through an agent. For example, a lender client might engage an appraiser through an appraisal management company (AMC) which is acting as an agent for the client. It is permissible for an appraiser to be engaged in an assignment by an agent, who is acting on behalf of the client. True False True An appraiser performs an appraisal assignment and develops an opinion of value. This value opinion is
an estimate of fact an assignment result a fact an assignment result According to USPAP, the party or parties who engage an appraiser in a specific assignment defines the: Appraiser's peers Client Party who pays the fee Other intended users Client Who is responsible for making the identification of the intended use in an assignment? The intended users themselves The appraiser The client The Appraisal Standards Board the appraiser An intended user is:
- Anyone who uses the appraisal report
- Only the party who pays for the appraisal report
- A party who is identified by the appraiser based on communication with the client at the time of the assignment
- Anyone who receives the appraisal report from the client
- A party who is identified by the appraiser based on communication with the client at the time of the assignment
Voluntary guidance Statements on Appraisal Standards Standards Rules "The type and extent of research and analyses in an appraisal or appraisal review assignment" is the definition of ___________. Report Scope of work Intended use Signature Scope of work If an appraiser assumes a condition to be true that does not exist for the purposes of analysis, this is an example of: An assumption A limiting condition A hypothetical condition An extraordinary assumption A hypothetical condition "The monetary relationship between properties and those who buy, sell or use those properties" is the definition of: Price Cost None of these Value Value An intended user is:
- Anyone who receives the appraisal report from the client
- Only the party who pays for the appraisal report
- Anyone who uses the appraisal report
- A party who is identified by the appraiser based on communication with the client at the time of the assignment A party who is identified by the appraiser based on communication with the client at the time of the assignment It is permissible for an appraiser to be engaged in an assignment by an agent, who is acting on behalf of the client. False True True Note: The ETHICS RULE is made up of three sections: Conduct Management Confidentiality The Conduct section of this Rule covers four activities: General conduct Development Communication Disclosure Note: The ETHICS RULE is made up of three sections: Conduct Management Confidentiality
The ethical obligations of USPAP apply to: Individual appraisers The Conduct section of the ETHICS RULE also requires an appraiser to disclose:whether or not the appraiser has provided services regarding the subject property within the prior______________ years immediately prior to the assignment. 3 years An appraiser must disclose any service he or she provided regarding the subject property for a period of _________ prior to agreeing to perform the assignment. USPAP does not specify a prior time period Three years Ten years One year Three years An appraiser is disclosing to a client the fact that she had previously appraised the subject property within the prior three years. When making this disclosure, the appraiser must be careful to:
- Obtain a release from the previous client in order to proceed with the new assignment
- Not disclose confidential information from the previous assignment
- Transmit a complete copy of the prior appraisal report and workfile to the new client
- Provide the date and the value conclusion from the prior appraisal
- Not disclose confidential information from the previous assignment
An appraiser has been asked to complete an appraisal assignment. The fee is to be paid only if the loan closes. According to USPAP, may the appraiser accept the assignment under these conditions?
- No, the fee arrangement is an unethical contingency arrangement and violates the ETHICS RULE.
- Yes, this is a business decision between the appraiser and the client.
- Yes, as long as the appraiser clearly discloses the basis of such a contingency in the certification and in any letter of transmittal.
- No, unless the appraiser receives written permission allowing the transfer of the appraisal to other parties.
- No, the fee arrangement is an unethical contingency arrangement and violates the ETHICS RULE. In a real property appraisal assignment prepared for a mortgage lender, an appraiser is permitted by USPAP to base his compensation for an appraisal assignment on:
- Whether or not the report is transmitted to the client by the due date
- Whether or not the loan transaction closes
- Reconciling the value conclusion to the high end of the indicated range
- The amount of the value opinion
- Whether or not the report is transmitted to the client by the due date An appraiser may base his or her fee on whether or not the report is delivered in a timely manner. However, the other answer choices were all listed in the ETHICS RULE as unethical contingencies. The Confidentiality section of the ETHICS RULE prohibits an appraiser from disclosing confidential information or _________ to
