Quality Assurance & Improvement Flashcards
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Read the first 7 Quality Assurance & Improvement flashcards as text
USPAP's Ethics Rule prohibits an appraiser from accepting an assignment with a predetermined opinion of value. If a reviewer discovers evidence that the original appraisal was 'pre-cooked,' the reviewer should:
Answer: Refuse to complete the review and notify the client of the potential USPAP violation
Evidence of a predetermined value constitutes a potential USPAP Ethics Rule violation, and the reviewer should notify the client rather than complete a normal review.
The term 'bracketing' in the appraisal review context means:
Answer: Using comparables that are both superior and inferior to the subject in key attributes
Bracketing means selecting comparables that straddle the subject's characteristics — some superior, some inferior — to support market-derived adjustments.
Under the Dodd-Frank Act's appraisal requirements for higher-priced mortgage loans (HPMLs), lenders must provide the borrower with:
Answer: A copy of the appraisal at least 3 business days before loan consummation
Dodd-Frank requires lenders to provide HPML borrowers a copy of the appraisal at least 3 business days before consummation.
A reviewer notes that an appraisal report's effective date is six months prior to the date of the review, and market conditions have changed significantly. The reviewer should:
Answer: Note that the original value conclusion is as of the original effective date and assess whether the report was credible as of that date
The reviewer evaluates the original report's credibility as of its effective date; market changes since then do not retroactively make the original report deficient.
Which of the following BEST describes a 'retrospective appraisal review'?
Answer: A review of an appraisal that was completed in the past, assessing its quality as of the original effective date
A retrospective review assesses the quality of an appraisal that was completed in the past, judging it against the standards and market data available at the original effective date.
The Uniform Collateral Data Portal (UCDP) was established to:
Answer: Allow Fannie Mae and Freddie Mac to receive and review appraisal data electronically before loan purchase
UCDP is a joint portal through which lenders submit appraisal reports electronically to Fannie Mae and Freddie Mac for review prior to loan purchase.
An appraisal review reveals that the appraiser selected only comparables from outside the subject's neighborhood while ignoring closer, more similar sales within it. This is MOST likely evidence of:
Answer: Cherry-picking comparables to support a target value
Bypassing proximate, similar sales in favor of distant ones that better support a predetermined conclusion is a hallmark of cherry-picking to manipulate value.