USPAP USPAP Compliance and Enforcement 3 — Questions and Answers
Question 1: What is the significance of USPAP's Advisory Opinions?
- They are legally binding amendments to USPAP
- They provide guidance on how to apply USPAP in specific situations but do not establish new requirements (Correct answer)
- They replace outdated USPAP standards automatically
- They are issued by state licensing boards to clarify local requirements
Correct answer: They provide guidance on how to apply USPAP in specific situations but do not establish new requirements
Advisory Opinions offer illustrative guidance on applying USPAP to specific scenarios but do not add to or modify the actual standards.
Question 2: Under USPAP, Frequently Asked Questions (FAQs) issued by The Appraisal Foundation are:
- Legally binding interpretations of USPAP
- Official amendments to current USPAP standards
- Non-binding educational guidance to help appraisers understand USPAP (Correct answer)
- Required disclosures in every appraisal report
Correct answer: Non-binding educational guidance to help appraisers understand USPAP
FAQs provide non-binding educational guidance to help appraisers understand and apply USPAP but do not have the force of a standard.
Question 3: If a state law requires an appraiser to include specific disclosures not mentioned in USPAP, which of the following applies?
- USPAP supersedes state law in all cases
- The appraiser must follow state law and may use the jurisdictional exception if there is a conflict with USPAP (Correct answer)
- The appraiser should ignore the state law and follow USPAP only
- The appraiser must get written permission from the ASB to comply with state law
Correct answer: The appraiser must follow state law and may use the jurisdictional exception if there is a conflict with USPAP
State law requirements must be followed, and if they conflict with USPAP, the jurisdictional exception permits deviation from the specific conflicting USPAP requirement.
Question 4: Which federal law created the requirement for state-licensed or state-certified appraisers for federally related transactions?
- The Equal Credit Opportunity Act (ECOA)
- The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) (Correct answer)
- The Real Estate Settlement Procedures Act (RESPA)
- The Dodd-Frank Wall Street Reform Act
Correct answer: The Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA)
FIRREA, enacted in 1989, established the requirement for state-licensed or certified appraisers in federally related real estate transactions.
Question 5: Which body maintains the National Registry of state-licensed and state-certified appraisers?
- The Appraisal Institute
- The Appraisal Qualifications Board (AQB)
- The Appraisal Subcommittee (ASC) (Correct answer)
- The Appraisal Standards Board (ASB)
Correct answer: The Appraisal Subcommittee (ASC)
The Appraisal Subcommittee (ASC) maintains the National Registry of licensed and certified appraisers as part of its federal oversight role.
Question 6: Under USPAP, what is the consequence if an appraiser fails to maintain a work file for the required retention period?
- The value opinion is automatically invalidated
- The appraiser may be subject to disciplinary action for violating the Record Keeping Rule (Correct answer)
- The client may demand a new appraisal at no charge
- The state may suspend the appraiser's fee schedule
Correct answer: The appraiser may be subject to disciplinary action for violating the Record Keeping Rule
Failure to maintain work files for the required period violates USPAP's Record Keeping Rule and can result in state disciplinary action.
USPAP USPAP Compliance and Enforcement 3
What is the significance of USPAP's Advisory Opinions?