USPAP USPAP Compliance and Enforcement 1 — Questions and Answers
Question 1: Which organization publishes USPAP and is responsible for its ongoing development?
- The Federal Housing Finance Agency (FHFA)
- The Appraisal Subcommittee (ASC)
- The Appraisal Standards Board (ASB) of The Appraisal Foundation (Correct answer)
- The Appraisal Institute
Correct answer: The Appraisal Standards Board (ASB) of The Appraisal Foundation
The Appraisal Standards Board (ASB), a board of The Appraisal Foundation, is responsible for developing and publishing USPAP.
Question 2: State appraisal regulatory agencies enforce USPAP compliance primarily through:
- Annual mandatory audits of all appraisers
- Investigating complaints and disciplining appraisers who violate USPAP (Correct answer)
- Publishing lists of approved appraisers
- Setting appraiser fee schedules
Correct answer: Investigating complaints and disciplining appraisers who violate USPAP
State agencies investigate complaints against appraisers and impose discipline for USPAP violations, which may include license suspension or revocation.
Question 3: Under USPAP, which of the following can result in a formal disciplinary action against an appraiser?
- Using the income approach for a residential property
- Submitting a report with a value opinion the client disagrees with
- Developing an appraisal that contains materially false or misleading statements (Correct answer)
- Declining an assignment due to lack of competency
Correct answer: Developing an appraisal that contains materially false or misleading statements
Materially false or misleading statements in an appraisal report violate the Ethics Rule and can result in formal disciplinary action.
Question 4: The Appraisal Subcommittee (ASC) oversees state appraisal regulatory agencies primarily to ensure:
- Uniform fee schedules across states
- Adequate oversight of federally regulated real estate transactions (Correct answer)
- That only Appraisal Institute members are licensed
- That all appraisals are reviewed by a federal agency
Correct answer: Adequate oversight of federally regulated real estate transactions
The ASC monitors state agencies to ensure they effectively regulate appraisers involved in federally related real estate transactions.
Question 5: A complaint against an appraiser for a USPAP violation is typically investigated by:
- The Appraisal Foundation directly
- The appraiser's professional association
- The state appraisal regulatory agency where the appraiser is licensed (Correct answer)
- The federal banking regulator overseeing the lender
Correct answer: The state appraisal regulatory agency where the appraiser is licensed
State appraisal regulatory agencies receive and investigate complaints against appraisers licensed in their jurisdiction.
Question 6: Which of the following is a potential consequence of a proven USPAP Ethics Rule violation?
- Mandatory additional appraisal education only
- Civil liability only, with no effect on licensure
- License suspension, revocation, or other disciplinary action by the state (Correct answer)
- Automatic disqualification from Appraisal Institute membership
Correct answer: License suspension, revocation, or other disciplinary action by the state
Proven USPAP violations can result in license suspension, revocation, or other regulatory sanctions by the state appraisal licensing agency.
USPAP USPAP Compliance and Enforcement 1
Which organization publishes USPAP and is responsible for its ongoing development?