CAR Technology & Tools 3 — Questions and Answers
Question 1: When reviewing a desktop appraisal, which data source is most relied upon to verify physical property characteristics in the absence of a physical inspection?
- The appraiser's personal knowledge of the neighborhood
- Property data collector (PDC) reports and public records (Correct answer)
- Borrower-provided photographs only
- Lender's internal AVM output
Correct answer: Property data collector (PDC) reports and public records
Desktop appraisals rely on property data collector reports, public records, MLS data, and other third-party sources to verify characteristics without direct inspection.
Question 2: A Geographic Information System (GIS) tool is most useful to an appraisal reviewer for:
- Calculating mortgage payment schedules
- Mapping comparable sales locations and identifying neighborhood boundaries (Correct answer)
- Generating appraisal report templates
- Submitting appraisal data to the UCDP
Correct answer: Mapping comparable sales locations and identifying neighborhood boundaries
GIS tools allow reviewers to spatially map comparables, visualize market areas, and confirm that selected comparables fall within appropriate geographic boundaries.
Question 3: An Automated Valuation Model (AVM) should generally NOT be used as the sole basis for an appraisal review conclusion because:
- AVMs are too expensive for routine review use
- AVMs lack the judgment, inspection, and market nuance that a credible valuation requires (Correct answer)
- AVMs are only approved for commercial property reviews
- AVMs always produce higher values than appraisers
Correct answer: AVMs lack the judgment, inspection, and market nuance that a credible valuation requires
AVMs are algorithmic tools that cannot replicate an appraiser's physical inspection, market expertise, and reasoned judgment, so they cannot substitute for a credible appraisal.
Question 4: Which of the following best describes the UAD requirement for reporting gross living area (GLA) in appraisal software?
- GLA must be rounded to the nearest 100 square feet
- GLA must be reported to the nearest whole square foot (Correct answer)
- GLA is reported in cubic feet for UAD compliance
- GLA may be estimated within a 10% tolerance without disclosure
Correct answer: GLA must be reported to the nearest whole square foot
UAD requires GLA to be reported to the nearest whole square foot, ensuring data consistency across submissions.
Question 5: A reviewer using appraisal review software identifies that an appraiser's adjusted comparable sale prices have a coefficient of variation (CV) exceeding 15%. This most likely indicates:
- The adjustment process was well-supported and the comparables are tightly grouped
- High variability in the adjusted values, suggesting comparables may not be truly similar or adjustments may be inconsistent (Correct answer)
- The appraiser properly adjusted for all differences between the subject and comparables
- The software encountered a data entry error that should be disregarded
Correct answer: High variability in the adjusted values, suggesting comparables may not be truly similar or adjustments may be inconsistent
A high CV in adjusted sale prices signals dispersion that questions whether the comparables are truly comparable or whether the adjustments are well-supported.
Question 6: When an appraisal report's XML data is submitted to UCDP and returns a 'hard stop' error, this means:
- The appraisal has been accepted and flagged for secondary review
- A critical data error exists that prevents submission acceptance until corrected (Correct answer)
- The lender must obtain a second appraisal immediately
- The GSE has automatically rejected the loan application
Correct answer: A critical data error exists that prevents submission acceptance until corrected
A UCDP hard stop is a submission error that blocks acceptance and requires the submitter to correct the identified data issue before resubmitting.
Question 7: Which technology tool helps reviewers assess whether an appraiser's market conditions adjustment is supported by actual sales trend data?
- Paired-sales or time-series regression analysis tools (Correct answer)
- The FHA EAD portal
- MISMO schema validators
- UAD condition rating tables
Correct answer: Paired-sales or time-series regression analysis tools
Time-series regression or paired-sales analysis tools quantify price trend rates over time, providing objective support for or against a market conditions adjustment.
CAR Technology & Tools 3
When reviewing a desktop appraisal, which data source is most relied upon to verify physical property characteristics in the absence of a physical inspection?