Appraisal Standards and Practices, Exams of Banking Law and Practice

Download Appraisal Standards and Practices and more Exams Banking Law and Practice in PDF only on Docsity! USPAP Practice Exam 2024 Questions with 100% correct answers verified. The PREAMBLE states the purpose of USPAP is to promote and maintain a high level of public _____ in appraisal practice by establishing requirements for appraisers. A) Awareness B) Recognition C) Support D) Trust - Answer- D) Trust USPAP benefits providers of appraisal services and a. the Appraisal Standards Board. b. disinterested parties. c. federal officials. d. users of appraisal services. - Answer- D) Users of appraisal services When acting in the role of an appraiser, all of the following require compliance with all sections of USPAP, including the applicable STANDARDS 1 through 10, EXCEPT for a. appraisal. b. appraisal consulting. c. appraisal course development. d. appraisal review. - Answer- C) Appraisal course development A valuation service performed by an individual acting as an appraiser requires the appraiser to a. hold a valid appraiser credential. b. inquire about the intended user's expectations. c. keep confidential the capacity in which he is performing. d. not be impartial in respect to the client. - Answer- B) Inquire about the intended user's expectations. When an individual is performing valuation services outside of appraisal practice, that individual must be careful to a. charge a fee for his service. b. invoke jurisdictional exception. c. not misrepresent his role. d. refer to the party engaging him as "the client:' - Answer- C) Not misrepresent his role When choosing to provide a valuation service as an appraiser or in some other capacity, great care must be taken to a. charge a fee accordingly. b. keep that capacity confidential. c. maintain public trust. d. not violate the obligations of an Advisory Opinion. - Answer- C) Maintain public trust A real property appraiser teaching appraisal is engaged in a. appraisal consulting services. b. appraisal review. c. appraisal practice with no applicable Standards (1-10). d. valuation service outside of appraisal practice. - Answer- C) Appraisal practice with no applicable Standards (1-10) A lender has telephoned an appraiser to determine the high and low sales prices in the past year that took place in the Green Hills Subdivision. No mention was made of a subject property by the lender. The b. make proper disclosure regarding the prior assignment c. refuse the assignment since re-appraisal of the same property is prohibited under USPAP d. update the prior assignment and use it for the new assignment - Answer- B) Make proper disclosure regarding the prior assignment. 16. Marcus was hired to appraise a home that he had previously appraised one year ago. May Marcus accept the assignment? a. yes, as long as he discloses the previous service on the property to the client and in the subsequent report certification b. yes, as long as he does not disclose that he had previously appraised the property c. no, an appraiser may not accept an assignment on the same property within three years of the prior assignment d. no, since an appraisal was recently performed, he may be biased about certain aspects of the home - Answer- A) yes, as long as he discloses the previous service on the property to the client and in the subsequent report certification A real property appraiser has paid a fee to procure an appraisal assignment. According the Management section of the ETHICS RULE, where must the fee be disclosed? a. in the body of the appraisal report b. in the certification and any transmittal letter c. in the engagement letter d. in a separate disclosure to the client - Answer- B) in the certification and any transmittal letter Josh received an appraisal request from a lender-client who told him to immediately call if the value on the property is less than the amount stipulated by the lender, as he doesn't intend to pay for an appraisal that won't benefit his position. Will acceptance of this assignment be in compliance with USPAP? a. yes, it is permissible for a client to call the client with the value prior to adequately supporting the opinion b. yes, this would be a hypothetical condition, which is acceptable c. no, an appraiser may not accept an assignment with unacceptable assignment conditions d. no, it is not permissible unless Josh discloses this fact in the certification per STANDARD 2 - Answer- C) no, an appraiser may not accept an assignment with unacceptable assignment conditions Which of the following would NOT be considered an unacceptable fee arrangement? a. fee based on the appraised value of the subject property b. fee based on the volume of total business from a particular client c. fee contingent on the closing of the subject's loan transaction d. fee contingent on winning a court case where the appraiser provided an appraisal - Answer- B) fee based on the volume of total business from a particular client According to the Management section of the ETHICS RULE, an appraiser affixes bis or her signature in an assignment/or what purpose? a. affirmation of his identity b. authenticate the work of the appraiser c. certify recognition and acceptance of USPAP responsi bi Ii ties d. comply with federal copyright law - Answer- C) certify recognition and acceptance of USPAP responsibilities. A real property appraiser has taken great precaution to safeguard his electronic signature; however, the signature bas been illegally obtained and used without the appraiser's authorization. Has the appraiser violated USPAP? a. yes, an appraiser is always liable regardless of how the signature was obtained b. yes, this is one of many examples of the danger of using electronic signatures c. no, if the appraiser used great care, he is not responsible for unauthorized use d. no, USPAP does not reference the issue - Answer- C) no, if the appraiser used great care, he is not responsible for unauthorized use Confidential information can be disclosed to persons specifically authorized by the client, state appraisal agencies, third parties as authorized by law, or a(n) a. attorney at law. b. duly authorized professional peer review committee. c. party who paid for the appraisal. d. potential client who is using the information to place the appraiser on an "approved" list. - Answer- B) duly authorized professional peer review committee. Anne, a real property appraiser, recently completed an appraisal assignment for a lender-client of a residential property for a refinance transaction. The property owner bas just called Anne to inquire about the appraised value. Which is a true statement? a. Anne must get consent from the lender prior to disclosing the appraised value. b. If the property owner paid for the appraisal, he is an intended user. c. The property owner is entitled to the information. d. Under no circumstance may Anne disclose the appraised value. - Answer- A) Anne must get consent from the lender prior to disclosing the appraised value. When an appraiser is offered the opportunity to appraise a property for a new client that was the subject of a prior assignment, and the appraiser is not bound to keep the previous assignment confidential, the appraiser must a. decline the assignment. b. disclose all confidential information. cl obtain a release from the client in the first assignment. d. protect any confidential information from the first assignment and disclose the prior appraisal. - Answer- D) protect any confidential information from the first assignment and disclose the prior appraisal. Which best defines a professional peer review committee? a. Appraisal Standards Board b. committee comprised of other appraisers c. lender organization approving appraisers a. documentation to support the appraiser's opinions and conclusions b. references to the location of other documentation not in the workfile c. specific names of other intended users d. true copies of any written reports - Answer- C) specific names of other intended users Which is NOT an element of problem identification? a. assignment conditions b. client and other intended users c. effective date of the opinions and conclusions d. reporting option to be used in the assignment - Answer- D) reporting option to be used in the assignment Most of the information necessary for the appraiser to identify the problem in a particular assignment a. must be identified without client input. b. requires communication with the client. c. reveals itself while gathering data. d. will be the same in every assignment. - Answer- B) requires communication with the client. An appraiser's peer is defined as a. another appraiser possessing the same credentials. b. appraisers who work in the same geographic area. c. other appraisers who have expertise and competency in a similar type of assignment. d. a regularly intended user in a similar assignment. - Answer- C) other appraisers who have expertise and competency in a similar type of assignment. When can an extraordinary assumption be used regarding information not available to the appraiser due to assignment conditions? a. it cannot be used b. when the client directs it be used c. when credible assignment results can still be developed d. when there are no other intended users - Answer- C) when credible assignment results can still be developed Which is NOT an option when an appraiser finds circumstances that change the research and analysis that he originally planned at the onset of an assignment? a. disregard the circumstances and proceed as originally planned b. modify the scope of work c. use an extraordinary assumption if credible results could be obtained d. withdraw from the assignment - Answer- A) disregard the circumstances and proceed as originally planned The scope of work disclosed in an appraisal report must include the a. appraiser's final conclusions and value opinion. b. initially planned scope of work at the onset of the assignment. c. intended use in the assignment. d. scope of work that was actually performed. - Answer- D) scope of work that was actually performed. Which is NOT a force that could cause an appraiser to invoke the JURISDICTIONAL EXCEPTION RULE? a. administrative rules and ordinances b. attorney at law c. constitutional law d. legislative and court-made law - Answer- B) attorney at law When the JURISDICTIONAL EXCEPTION RULE is invoked, who determines if the Rule is appropriate? a. the appraiser b. the client c. the intended users d. state and local authorities - Answer- A) the appraiser Scope of work is the type and extent of research and ____ in an assignment. a. analysis b. diligence c. inspection d. reporting - Answer- A) Analysis Which would NOT be part of the scope of work decision? a. extent of inspection b. extent of property identification c. reporting option and format d. type and extent of data to be researched - Answer- C) reporting option and format The scope of work in each particular assignment must be determined when the assignment involves a. an appraisal, appraisal review, or appraisal consulting. b. any appraisal practice. c. intended users other than the client. d. valuation services performed by an appraiser. - Answer- A) an appraisal, appraisal review, or appraisal consulting. When deciding the scope of work, an appraiser must be prepared to demonstrate that the scope of work is sufficient to a. actual income and expense data of the property. b. the basis of an extraordinary assumption. c. nationally published income and expense data. d. reasonably clear and appropriate evidence. - Answer- D) reasonably clear and appropriate evidence. Standards Rule 1-2 of USPAP prohibits an appraiser from allowing the or a ___ client's objectives to cause the assignment results to be biased. a. intended use of an assignment b. neighborhood composition c. property's relevant characteristics d. quality and quantity of data analyzed - Answer- A) intended use of an assignment Prospective value opinions occur when the value opinion is expressed a. as a value opinion expressed in relationship to a monetary benchmark. b. as an amount greater than the appraiser's value opinion. c. as of an effective date in the future. d. in an assignment using hypothetical conditions. - Answer- C) as of an effective date in the future. What is an appraiser NOT required to do when the subject property is a fractional interest, physical segment, or a partial holding? a. analyze the market b. determine the scope of work c. reconcile the conclusions d. value the whole property - Answer- D) value the whole property Standards Rule 1-5 states that appraisers must analyze agreements of sale, options, and listings of the subject property current as of the effective date of an appraisal, in a market value assignment, if it is a. a matter of public record. b. available in the normal course of business. cl not deemed confidential information. d. required by the client. - Answer- B) available in the normal course of business. Standards Rule 2-1 of USPAP requires that appraisal reports contain to enable ___ intended users to understand the report properly. a. definitions of appraisal terms b. exhibits and photographs c. Simple and common language d. sufficient information - Answer- D) sufficient information Standards Rule 2-2 of USPAP requires an appraiser to which reporting option ___ is being used in the assignment. a. document in the workfile b. keep confidential c. prominently state in the report d. specify in the certification - Answer- C) prominently state in the report An appraiser bas agreed to physically inspect the subject property in a particular appraisal assignment. q the appraiser reviews photographs and other documents that illustrate the relevant characteristics of the property and indicates in the certification language that he bas physically inspected the property, the report would be a. acceptable as long as another appraiser actually visited the property. b. based upon an extraordinary assumption that the documents were correct. cl considered part of a service outside of appraisal practice. d. misleading and in violation of the Conduct section of the ETHICS RULE. - Answer- D) misleading and in violation of the Conduct section of the ETHICS RULE. STANDARD 2 does NOT a. cover communication of a real property appraisal. b. dictate the form, style, or format of an appraisal report. c. dictate the Standards, Rules, and requirements that must be adhered to when completing an appraisal report. d. detail the elements and certifications that must be part of every real property appraisal report. - Answer- B) dictate the form, style, or format of an appraisal report. According to Standards Rules 2-2( a), (b ), and (c)(viii) of USPAP, regarding the information analyzed and methodology used in an assignment, the exclusion of ___ must be explained. a. assignment results that are credible b. determining the scope of work necessary c. significant real property appraisal assistance d. the sales comparison approach, cost approach, or income approach - Answer- D) the sales comparison approach, cost approach, or income approach 63. The contents of a workfile in support of a Restricted Use Appraisal Report must include sufficient information for an appraiser to produce a a. Letter of Opinion. b. Restricted Use Appraisal Report. c. Self-Contained Appraisal Report. d. Summary Appraisal Report. - Answer- D) Summary Appraisal Report. Which report option permitted by USPAP "describes" information that is significant to the solution of the appraisal problem? a. Narrative Appraisal Report b. Restricted Use Appraisal Report c. Self-Contained Appraisal Report d. Summary Appraisal Report - Answer- C) Self-Contained Appraisal Report Which term is defined by USPAP as a mathematical expression of bow supply and demand/actors interact in a market? a. business enterprise appraisal b. highest and best use analysis c. mass appraisal model d. value opinion - Answer- C) mass appraisal model Which Standard in USPAP expresses that the certification in compliance with this Standard is not intended to disturb an elected or appointed assessor's work plans or oaths in office? a. STANDARD 4 b. STANDARD 6 c. STANDARD 7 d. STANDARD 9 - Answer- B) STANDARD 6 Standards Rule 4-2 of USPAP obligates an appraiser performing a real property appraisal consulting assignment to ensure that any opinion of value being used as a component of the analysis was developed in compliance with a. STANDARD 1. b. STANDARD 2. c. STANDARD 3. d. STANDARD 4. - Answer- A) STANDARD 1. According to Standards Rule 5-2 of USPAP, if the consulting appraiser developed the value opinion used in the real property appraisal consulting assignment, the information must be reported within the consulting report in compliance with a. the SCOPE OF WORK RULE. b. STANDARD 1. c. STANDARD 4. d. Standards Rule 2-2(a), (b), or (c)(ii-x). - Answer- D) Standards Rule 2-2(a), (b), or (c)(ii-x). In an appraisal for ad valorem taxation purposes, when only one property is the subject of the appraisal assignment, which development Standard would apply? a. STANDARD 1 b. STANDARD 2 c. STANDARD 4 d. STANDARD 6 - Answer- A) STANDARD 1 What service is an appraiser providing when the purpose of the assignment is to report an opinion or recommendation where at least one opinion of value was a component of his analysis? a. appraisal b. appraisal consulting c. appraisal review d. other type of valuation service - Answer- B) appraisal consulting In an assignment/or which the appraiser was hired by an appraisal management company {AMC), the appraiser may consider the lender the client as long as the AMC is a. an authorized representative of the lender. b. an intended user in the report. c. not the party paying the appraiser. d. party to a contractual agreement with the appraiser. - Answer- A) an authorized representative of the lender. Intended users in a specific assignment must be identified a. by name or type. b. during the research and analysis process. c. in the report certification. d. without communication with the client. - Answer- A) by name or type Within USPAP, the appraiser's ___ are {is) always specific to the intended use. a. fee for the assignment b. impartiality c. level of independence d. opinions and conclusions - Answer- D) opinions and conclusions The intended use and the intended user of the appraiser's opinions and conclusions are identified ___ the assignment. a. anytime during b. at the time of c. prior to the acceptance of d. while determining the scope of work in - Answer- B) at the time of While in the role of an appraiser, advocacy a. is not permitted. b. is permitted if disclosed in the report. c. is permitted if requested by the client. d. only applies to appraisal review. - Answer- A) is not permitted. Craig, a real property appraiser, is not an expert in real estate law. In every assignment, he includes a disclosure stating this fact and that in his conclusions he is considering the property to have good and marketable title. Which best describes Craig's action? a. assumption b. extraordinary assumption a. create a benchmark for appraiser regulation and credentials. b. establish a common set of standards for those using appraisal services. c. promote and maintain a high level of public trust in appraisal practice. d. satisfy federal requirements for appraisal regulation - Answer- C) promote and maintain a high level of public trust in appraisal practice. In the USPAP Appraisal Process, which -is the final step in the development process? a. problem identification b. reconciliation and final value opinion c. reporting the defined value opinions d. research and analysis of data - Answer- B) reconciliation and final value opinion Which entity or group is responsible for creating and maintaining the national appraiser examination? a. Appraiser Qualifications Board b. Appraisal Standards Board c. Appraisal Subcommittee d. Individual states - Answer- A) Appraiser Qualifications Board Which is a direct responsibility of the Appraisal Subcommittee? a. develop laws for licensed/certified appraisers b. maintain the National Registry of licensed/certified real property appraisers c. make an annual report to the Board of Trustees of the appraisal foundation. d. Provide tuition grants to appraisers for appraisal education. - Answer- B) maintain the National Registry of licensed/certified real property appraisers Statements on appraisal standards are a. considered additional guidance material outside of USPAP. b. for the purpose of illustrating USPAP in specific situations. c. an integral part that has the full weight of USPAP. d. not included in USPAP, but rather addenda. - Answer- C) an integral part that has the full weight of USPAP. Which board exercises all authority and power over the subject, style, content, and substance of USPAP and other communications related to Standards? a. Appraiser Qualifications Board b. Appraisal Standards Board ca Appraisal Subcommittee d. Board of Trustees - Answer- B) Appraisal Standards Board Which board establishes minimum education, experience, and examination requirements for real property appraisers to obtain certification? a. Appraiser Qualifications Board b. Appraisal Standards Board c. Appraisal Subcommittee d. Board of Trustees - Answer- A) Appraiser Qualifications Board Which entity ensures that real estate appraisers who could expose the United States to financial loss are sufficiently trained and tested? a. Appraisal Standards Board b. Appraisal Subcommittee c. Financial Institutions Reform Recovery and Enforcement Committee d. state appraisal boards - Answer- B) Appraisal Subcommittee Shelia had concerns about an appraisal situation, and she was uncertain how to proceed. Sheila then consulted the USPAP Advisory Opinions, which a. establishes new standards or interprets existing standards. b. illustrates the applicability of USPAP in specific situations. c. offers opinions and advice that are presented and approved after public comment. d. supplements the USPAP Standards and Rules. - Answer- B) illustrates the applicability of USPAP in specific situations. Which would NOT be an example of an appraisal consulting assignment? a. conclusion of the benefit of a proposed improvement versus its cost b. opinion of highest and best use based on appraised value of potential uses c. recommendation of the ideal improvement for a property based on an appraisal d. value opinion of a completed development project - Answer- D) value opinion of a completed development project