15-Hour National USPAP Exam 102 Questions with Answers
What are the 4 sections of USPAP? - CORRECT ANSWER -preamble
-definitions
-rules
-standards
... [Show More] (including standards rules)
Benefits of USPAP - CORRECT ANSWER -provides a common basis for comparison
-provides a reference source for all users of the document
-provides a basis for uniform enforcement for state regulatory agencies
-provides a reason for clients, other intended users, and the public to place their trust in the services performed by professional appraisers
What does the Appraisal Foundation help do? - CORRECT ANSWER prevent financial losses in federally insured mortgages by setting stringent qualifications and standards for appraisers involved in real estate transactions
The Appraisal Foundation is organized into what 3 main boards? - CORRECT ANSWER -board of trustees (BOT)
-appraiser qualifications board (AQB)
-appraiser standards board (ASB)
Board of Trustees (BOT) - CORRECT ANSWER provides volunteer leadership and oversight for the Foundation
Appraiser Qualifications Board (AQB) - CORRECT ANSWER -an independent board of the Foundation
-sets minimum qualification criteria that must be met before entering the profession and qualifications to maintain a credential
Appraiser Standards Board (ASB) - CORRECT ANSWER -an independent board of the Foundation
-establishes the USPAP on an annual basis
When did the U.S. Congress enact FIRREA (Financial Institutions Reform, Recovery, and Enforcement Act)? - CORRECT ANSWER 1989
What created the ASC of the FFIEC (Federal Financial Institutions Examination Council)? - CORRECT ANSWER Title XI of FIRREA
What is one of ASC's core functions? - CORRECT ANSWER monitor the requirements established by state regulatory agencies for certification and licensing of appraisers qualified to perform appraisals in connection with federally related transactions
What was USPAP created to do? - CORRECT ANSWER to promote and preserve public trust in professional appraisal practice
The concept of trust obligates the appraiser to act in the public's interest, which means the appraiser must act with... - CORRECT ANSWER -independence
-impartiality
-objectivity
-competency
-integrity
Do the Appraisal Foundation and its boards have any legal oversight or enforcement authority in any jurisdiction? - CORRECT ANSWER no
USPAP achieves legal authority by... - CORRECT ANSWER adoption, citation, or implementation by government agencies through regulation or administrative actions, or by private enterprise in the form of contract requirements
The Foundation is structured to... - CORRECT ANSWER reflect its position within the appraisal profession as an organization of organizations
3 categories of Sponsors the Foundation has - CORRECT ANSWER -appraisal sponsors
-affiliate sponsors
-international sponsors
Appraisal Sponsors - CORRECT ANSWER consists of non-profit appraisal organizations servings appraiser
Affiliate Sponsors - CORRECT ANSWER consist of non-profit appraisal organizations serving those with an interest in valuation, primarily users of appraisal services
International Sponsors - CORRECT ANSWER consists of either non-profit or non-stock organizations based outside the U.S. with an interest in valuation
2 advisory councils the Appraisal Foundation has - CORRECT ANSWER -The Appraisal Foundation Advisory Council (TAFAC)
-The Industry Advisory Council (IAC)
The Appraisal Foundation Advisory Council (TAFAC) - CORRECT ANSWER made up of representatives from non-profit organizations and government entities
The Industry Advisory Council (IAC) - CORRECT ANSWER has members from for-profit organizations
The Appraisal Foundation develops... - CORRECT ANSWER -recruitment programs to fulfill the growing need for real property
-simulated experience training to offer additional supervisory training opportunities
-resources for veterans who are interested in entering the appraisal profession
-outreach to universities to recruit students into the profession
Board of Trustees (BOT) has 3 primary functions: - CORRECT ANSWER -appoints members to its independent boards
-secures funding for TAF operations
-monitors performance and oversight of the Foundation and its Boards and Advisory Councils
What is the governing body of the Foundation? - CORRECT ANSWER Board of Trustees
What does the AQB do? - CORRECT ANSWER establishes minimum education and experience for certification and recertification of real property appraisers and supervisors
What does the ASB do? - CORRECT ANSWER -writes, amends, and interprets USPAP
-responsible for the subject, content, and substance of USPAP and other communications related to appraisal standards
Most changes to USPAP have been the result of what? - CORRECT ANSWER unsolicited letters or response to exposure drafts from a variety of sources, including appraisal organizations, government agencies, client groups, work groups, appraisers, and members of the public
Advisory Opinions are described as... - CORRECT ANSWER not part of USPAP, but included as reference material
ASC has what duty? - CORRECT ANSWER ensure that the government has sufficient controls in place over all real property appraisal activity to protect the federally regulated financial institutions from loss
What is FFIEC (Federal Financial Institutions Examination Council)? - CORRECT ANSWER a formal interagency body empowered to prescribe uniform principles, standards, and report forms, and to make recommendations to promote uniformity in the supervision of financial institutions
ASC has 7 members, each appointed by the head of his or her agency and they represent: - CORRECT ANSWER -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)
Responsibilities of the ASC - CORRECT ANSWER -the ASC is not part of the Foundation but has the authority to monitor the activities of the Foundation, including both the ASB and AQB in regard to real property issues
-ASC administers grants to the Foundation that are used to support, in part, the real property-related work of the AQB and ASB
ASC operations - CORRECT ANSWER are funded through license renewal payments in the form of a National Registry fee and by AMC Registry fees
State appraiser regulatory agencies responsibilities - CORRECT ANSWER -validating qualifications of applicants, issuing credentials to certified individuals, and overseeing renewals of credentials in the form of continuing education
-taking disciplinary action against appraisers who violate USPAP or other appraisal standards
-administering registries of appraisal management companies (AMCs)
When does USPAP apply? - CORRECT ANSWER compliance is required when either the service or the appraiser is obligated to comply by law, regulation, or agreement with the client or other intended users
What is the purpose of the preamble of USPAP? - CORRECT ANSWER -identifies the purpose of USPAP
-states that USPAP is intended to benefit providers of appraisal services (appraisers) and users of appraisal services
Valuation Service - CORRECT ANSWER a service pertaining to an aspect of property value, regardless of the type of service and whether it is performed by appraisers or by others
Acting as an appraiser or performing a service "as an appraiser" means... - CORRECT ANSWER -representing oneself as an appraiser
-an expectation of appraisal competence in the service being provided
Which entity appoints member of the AQB and ASB? - CORRECT ANSWER BOT (Board of Trustees)
Market Value - CORRECT ANSWER -USPAP does not endorse any specific definition of market value or source
Bias - CORRECT ANSWER a preference or precludes an appraiser's impartiality, independence or objectivity in an assignment
Extraordinary assumption - CORRECT ANSWER -an assignment-specific assumption as of the effective date regarding uncertain information used in an analysis which, if found to be false, could alter the appraiser's opinions and conclusions
-involves a situation directly related to a specific assignment as of the effective date of the assignment results
Hypothetical condition - CORRECT ANSWER -a condition, directly related to a specific assignment, which is contrary to what is known by the appraiser to exist on the effective date of the assignment results, but is used for the purpose of analysis
-used when a property is appraised contrary to its current known condition
Exposure time - CORRECT ANSWER 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
Cost - CORRECT ANSWER the actual of estimate amount required to create, reproduce, replace or obtain a property
Price - CORRECT ANSWER -the amount asked, offered, or paid for a property
-becomes fact once it is stated
Value - CORRECT ANSWER -the monetary relationship between properties and those who buy, sell or use those properties, expressed as an opinion of the worth of a property at a given time
-value is always an opinion and never a fact
Appraiser - CORRECT ANSWER one who is expected to perform valuation services competently and in a manner that is independent, impartial, and objective
Client - CORRECT ANSWER the party or parties (individual, group, or entity) who engage an appraiser by employment or contract in a specific assignment, whether directly or through an agent
Assignment conditions - CORRECT ANSWER assumptions, extraordinary assumptions, hypothetical conditions, laws and regulations, jurisdictional exceptions, and other conditions that affect the scope of work
Assignment - CORRECT ANSWER a valuation service that is provided by an appraiser as a consequence of an agreement with a client
Assignment results - CORRECT ANSWER an appraiser's opinions or conclusions, not limited to value, that were developed when performing an appraisal assignment, an appraisal review assignment, or a valuation service other than an appraisal or appraisal review
Confidential information - CORRECT ANSWER information that is either identified by the client as confidential when providing it to an appraiser and that is not available from any other source; or classified as confidential or private by applicable law or regulation
Intended use - CORRECT ANSWER -the use or uses of an appraiser's reported appraisal or appraisal review assignment opinions and conclusions, as identified by the appraiser based on communication with the client at the time of the assignment
-critical to the scope of work decision
Intended user - CORRECT ANSWER the client and any other party as identified, by name or type, as users of the appraisal or appraisal review report by the appraiser on the basis of communication with the client at the time of the assignment
Report - CORRECT ANSWER any communication, written or oral, of an appraisal or appraisal review that is transmitted to the client or a party authorized by the client upon completion of an assignment
Signature - CORRECT ANSWER personalized evidence indicating authentication of the work performed by the appraiser and the acceptance of the responsibility for content, analyses, and the conclusions in the report
Workfile - CORRECT ANSWER data, information, and documentation necessary to support the appraiser's opinions and conclusions and to show compliance with USPAP
Valuation service - CORRECT ANSWER a service pertaining to an aspect of property value, regardless of the type of service whether it is performed by appraisers or by others
Appraisal practice - CORRECT ANSWER valuation services performed by an individual acting as an appraiser, including but not limited to appraisal and appraisal review
Appraisal - CORRECT ANSWER the act or process of developing an opinion of value; an opinion of value; of or pertaining to appraising and related functions such as appraisal practice or appraisal services
Appraisal review - CORRECT ANSWER The act or process of developing and communicating an opinion about the quality of another appraiser's work that was performed as part of an appraisal, appraisal review, or appraisal consulting assignment; of or pertaining to an opinion about the quality of another appraiser's work that was performed as part of an appraisal or appraisal review assignment
Scope of work - CORRECT ANSWER -the type and extent of research and analyses in an appraisal or appraisal review assignment
-for each appraisal, appraisal review, and appraisal consulting assignment, an appraiser must identify the problem to be solved, determine and perform the scope of work necessary to develop credible assignment results for the intended use, and disclose the scope of work performed in the report
Standard - CORRECT ANSWER a benchmark or set of criteria used to measure performacne
Standards rule - CORRECT ANSWER composed of the individual rules within each standard
The Ethics Rule requires that an appraiser must... - CORRECT ANSWER -not misrepresent his or her role when providing valuation services that are outside of appraisal practice
-certify recognition and acceptance of USPAP responsibilities in an appraisal or appraisal review assignment
-communicate in a manner that is not misleading
What 3 sections make up the Ethics Rule? - CORRECT ANSWER -conduct
-management
-confidentiality
Record Keeping Rule - CORRECT ANSWER establishes requirements for an appraiser's workfile - what it is, when it must be created, what must be in it, how long it must be maintained, and who has custody and retrieval responsibilities
An appraiser's workfile... - CORRECT ANSWER -must be in existence prior to the issuance of any report or other communication of assignment results
-must be prepared for each appraisal or appraisal review assignment
An appraiser's workfile must include... - CORRECT ANSWER -the name of the client and the identity, by name or type, of any other intended users
-true copies of all written reports, documented on any type of media
-summaries of all oral reports or testimony, or a transcript of testimony, including the appraiser's signed and dated certification
-all other data, information, and documentation necessary to support the appraiser's opinions and conclusions and to show compliance with USPAP, or references to the location(s) of such other data, information, and documentation
An appraiser must retain a workfile for a period of how many years? - CORRECT ANSWER at least 5 years after preparation or at least 2 years after final disposition of any judicial proceeding in which the appraiser provided testimony related to the assignment, whichever period expires last
Competency Rule - CORRECT ANSWER -sets forth some of the fundamental obligations inherent in appraisal practice
-applies to all of appraisal practice, including appraisal, appraisal review, and any other services provided by an individual acting as an appraiser
What 3 sections make up the Competency Rule? - CORRECT ANSWER -being competent
-acquiring competency
-lack of competency
If an appraiser realizes they do not have the competency to complete the assignment during the assignment what must they do? - CORRECT ANSWER -notify the client
-take all steps necessary or appropriate to complete the assignment competently
-describe, in the report, the lack of knowledge and/or experience and the steps taken to complete the assignment competently
Scope of Work Rule - CORRECT ANSWER the appraiser must identify the problem to be solved,
determine and perform the scope of work necessary to develop credible assignment results, and disclose the scope of work in the report
What are the 3 sections that make up the Scope of Work Rule? - CORRECT ANSWER -problem identification
-scope of work acceptability
-disclosure obligations
When is the scope of work acceptable? - CORRECT ANSWER when it meets or exceeds the expectations of parties who are regularly intended users for similar assignments, and what an appraiser's peers' actions would be in performing the same or a similar assignment
Who is ultimately responsible for the scope of work and the credibility of the assignment results? - CORRECT ANSWER the appraiser
Jurisdictional exception - CORRECT ANSWER an assignment condition established by applicable law or regulation, which precludes an appraiser from complying with a part of USPAP
Jurisdictional exception rule - CORRECT ANSWER an appraiser must identify the law or regulation that precludes compliance with USPAP, comply with that law or regulation, clearly and conspicuously disclose in this report that part of USPAP that is voided by that law or regulation, and cite in the report the law or regulation requiring this exception to USPAP compliance
Standard 1: Real Property Appraisal, Development - CORRECT ANSWER in developing a real property appraisal, an appraiser must identify the problem to be solved, determine the scope of work necessary to solve the problem, and correctly complete research and analyses necessary to produce a credible appraisal
What can the requirements of Standard 1 be used as? - CORRECT ANSWER a checklist by an appraiser who is developing a real property appraisal
Standard 2 - CORRECT ANSWER establishes requirements for communicating (reporting) real property appraisal assignments
Standard 3 - CORRECT ANSWER an appraiser acting as a reviewer must identify the problem to be solved, determine the scope of work necessary to solve the problem, and correctly complete research and analysis necessary to produce a credible appraisal review (applies to all property types)
Subject of an appraisal review includes... - CORRECT ANSWER another appraiser's work, a report, a part of a report, a workfile, or some combination of these
Standard 4 - CORRECT ANSWER an appraiser acting as a reviewer must communicate each analysis, opinion, and conclusion in a manner that is not misleading
Standard 5 - CORRECT ANSWER applies to all mass appraisals of real or personal property regardless of the purpose or use of such appraisals
Mass appraisal - CORRECT ANSWER the process of valuing a universe of properties as of a given date using standard methodology, employing common data, and allowing for statistical testing
In developing a mass appraisal what must an appraiser do? - CORRECT ANSWER identify the problem to be solved, determine the scope of work necessary to solve the problem, and correctly complete research and analyses necessary to produce a credible mass appraisal
Standard 6 - CORRECT ANSWER addresses the content and level of information required in communicating the results of a mass appraisal assignment
In reporting the results of a mass appraisal what must an appraiser do? - CORRECT ANSWER communicate each analysis, opinion, and conclusion in a manner that is not misleading
Standard 7 - CORRECT ANSWER addresses the development requirements for a personal property appraisal assignment
Standard 8 - CORRECT ANSWER addresses the content and level of information required in communicating the results of a personal property appraisal assignment
What must an appraiser do when reporting the results of a personal property appraisal? - CORRECT ANSWER communicate each analysis, opinion, and conclusion in a manner that is not misleading
Standard 9 - CORRECT ANSWER addresses the development requirements for an appraisal of an interest in a business enterprise or intangible asset
Business enterprise - CORRECT ANSWER an entity pursuing an economic activity
Business equity - CORRECT ANSWER the interests, benefits, and rights inherent in the ownership of a business enterprise or a part thereof in any form (including, but not necessarily limited to, capital stock, partnership interests, cooperatives, sole proprietorships, options, and warrants)
Intangible property - CORRECT ANSWER nonphysical assets, including but not limited to, franchises, trademarks, patents, copyrights, goodwill, equities, securities, and contracts as distinguished from physical assets such as facilities and equipment
What must an appraiser do when developing an appraisal of an interest in a business enterprise or intangible asset? - CORRECT ANSWER must identify the problem to be solved, determine the scope of work necessary to solve the problem, and correctly complete the research and analyses necessary to produce a credible appraisal
Standard 10 - CORRECT ANSWER addresses the content and level or information required in communicating the results of an appraisal in a business enterprise or intangible asset
What must an appraiser do when reporting the results of an appraisal of an interest in a business enterprise or intangible asset? - CORRECT ANSWER communicate each analysis, opinion, and conclusion in a manner that is not misleading [Show Less]