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V_Basic Appraisal Principles > Chapter 2 - Licensing and Certification > Flashcards

Chapter 2 - Licensing and Certification Flashcards

1
Q

In 1987, eight US appraisal organizations formed…

A

The Appraisal Foundation

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2
Q

True or False? The Appraisal Foundation has significant legal authority to enforce USPAP.

A

False. The appraisal Foundation is a private entity and has no enforcement authority in any jurisdiction.

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3
Q

In the 1970’s, who developed uniform rules for mortgage underwriting?

  • Professional appraisal organizations
  • The Appraisal Foundation
  • Fannie Mae and Freddie Mac
  • The Appraisal Subcommittee
A

Fannie Mae and Freddie Mac

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4
Q

The transfer of money from low interest-bearing accounts to higher interest-bearing accounts is referred to as

  • disintermediation
  • recession
  • surplus productivity
  • profiteering
A

Disintermediation

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5
Q

What is The Appraisal Foundation?

A

The Appraisal Foundation is a not-for-profit organization, established exclusively for educational and scientific purposes.

Membership in The Appraisal Foundation is reserved for organizations

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6
Q

The appraisal foundation consists of which 3 principal boards?

A

Board of Trustees (BOT)

Appraisal Standards Board (ASB)

Appraiser Qualifications Board (AQB)

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7
Q

What is the board of trustees and what are they responsible for?

A

Acts as an executive board for the Foundation. It is responsible for, among other things, appointing members of the ASB, AQB, and APB. 21 individuals.

ASB = Appraisal Standards Board

AQB = Appraiser Qualifications Board

APB = Appraisal Practices Board - APB was responsible for issuing voluntary guidance on recognized valuation methods and techniques. This board was disbanded in 2017 and no longer exists.

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8
Q

What is the ASB responsible for?

A

Appraisal Standards Board (ASB)

responsible for creating standards for ethics and performance of appraisers. This is accomplished through the Uniform Standards of Professional Appraisal Practice (USPAP). In short, the ASB is responsible for USPAP.

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9
Q

What is the AQB responsible for?

A

Appraiser Qualifications Board

AQB is responsible for creating requirements for licensure, certification, and recertification of appraisers, which the states adopt and enforce.

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10
Q

What was the Appraisal Practices Board (APB) responsible for?

A

The Appraisal Practices Board (APB) was responsible for issuing voluntary guidance on recognized valuation methods and techniques. This board was disbanded in 2017 and no longer exists.

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11
Q

Who first developed USPAP in 1986?

A

The Ad Hoc Committee

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12
Q

When and who adopted USPAP as the governing document?

A

The ASB in 1989

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13
Q

What year and why was FIREEA passed?

A
  1. As a result for the Savings and Loan Crisis of the 1980’s
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14
Q

What is FIRREEA often called?

A

The Savings and Loan Bailout Bill

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15
Q

What does FIREEA require?

A

Required each state to establish an agency for the licensing and certification of real property appraisers.

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16
Q

True or False? The Appraisal Subcommittee’s mission is to ensure that real estate appraisers who perform appraisals in federally-related transactions are sufficiently trained and tested to assure competency and independent judgment.

A

True

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17
Q

True or False? The Dodd-Frank Act gave the ASC the authority to create a National Registry of appraisal management companies.

A

True

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18
Q

The _________ monitors and reviews the practices, procedures, activities and organizational structure of The Appraisal Foundation.

  • AQB
  • Dept of HUD
  • ASC
  • FIRREA
A

ASC (Appraisal Subcomittee)

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19
Q

The first universally accepted appraisal report form appeared in the

  • 1920s
  • 1950s
  • 1970s
  • 1980s
A

1970’s

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20
Q

The ______ maintains a National Registry of licensed and certified appraisers.

  • AQB
  • ASB
  • ASC
  • FIRREA
A

ASC (Appraisal Subcommittee)

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21
Q

The Uniform Standards of Professional Appraisal Practice (USPAP) was copyrighted by:

  • The American Society of Appraisers
  • The Appraisal Qualifications Board
  • The Appraisal Foundation
  • The Appraisal Subcommittee
A

The Appraisal Foundation.

The Uniform Standards of Professional Appraisal Practice (USPAP) was developed by the Ad Hoc Committee in 1986 and 1987 and was copyrighted in 1987 by the Appraisal Foundation, and was adopted by the Appraisal Standards Board (ASB) in January 1989 as governing document.

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22
Q

The Uniform Standards of Professional Appraisal Practice (USPAP) was developed by the Ad Hoc Committee and was copyrighted by _________________.

A

The Appraisal Foundation

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23
Q

The first organized appraisal groups appeared in the

  • 1910s
  • 1930s
  • 1950s
  • 1980s
A

1930’s

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24
Q

The Appraisal Foundation is a _________ entity and has _____ legal enforcement authority in any jurisdiction.

  • government, no
  • private, full
  • private, no
  • quasi-judicial, full
A

Private, no

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25
Q

________ has regulatory authority in enforcing the housing requirements in most civil rights legislation.

  • Fannie Mae
  • VA
  • HUD
  • FDIC
A

HUD

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26
Q

Which of these is NOT a protected class, according to the Fair Housing Act?

  • religion
  • political party affiliation
  • familial status
  • national origin
A

Political party affiliation

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27
Q

ECOA (Equal Credit Opportunity Act ) applies to all the following types of loans EXCEPT

  • Condominiums
  • Manufactured homes
  • Junior liens
  • Vacant land
A

Vacant Land

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28
Q

The largest professional appraisal society in the U.S. is the

  • American Society of Appraisers
  • Appraisal Institute
  • American Society of Farm Managers and Rural Appraisers
  • International Right of Way Association
A

Appraisal Institute

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29
Q

The federal agencies directly involved in fair lending include all of the following EXCEPT

  • VA
  • The Federal Reserve
  • FDIC
  • OCC
A

VA

30
Q

The Savings and Loan Crisis happened in the

  • Great Depression
  • Early 1960s
  • Late 1970s
  • Late 1980s
A

Late 1980’s

31
Q

The Appraisal Foundation was established in

  • 1984
  • 1987
  • 1991
  • 1995
A

1987

32
Q

Mortgage interest rates peaked in the U.S. in the

  • late 1960s
  • early 1980s
  • early 1990s
  • late 2000s
A

Early 1980’s

33
Q

Handicap is defined as

  • a physical impairment only
  • a mental impairment only
  • a physical or mental impairments
  • omeone with both physical and mental impairments
A

A physical or mental impairment

34
Q

Which is considered to be “other communications” provided by the ASB?

  • Advisory Opinions
  • Index
  • Q & As
  • All of the above
A

All of the above

35
Q

The secondary market came into prominence in mortgage lending in the

  • mid 1950s
  • early 1960s
  • late 1970s
  • late 1990s
A

Late 1970’s. During the latter part of the 1970s, the secondary market emerged and served to smooth out the uneven flow of loan funds.

36
Q

The AQB and the ASB were created for the express purpose of promoting and maintaining a high level of ____________

  • public consciousness
  • education for appraisers
  • public trust
  • appraiser independence
A

Public Trust

37
Q

Within The Appraisal Foundation, there are ________ advisory councils that provide research and advice to the Foundation.

  • two
  • three
  • four
  • five
A

Two

38
Q

The professional society that specializes in appraising personal property is the

  • American Society of Appraisers
  • Appraisal Institute
  • American Society of Farm Managers and Rural Appraisers
  • National Association of Appraisers
A

American Society of Appraisers

39
Q

The appraisal standards and qualification criteria issued by The Appraisal Foundation’s boards achieve legal authority by adoption, citation or implementation by

  • government agencies
  • individual appraisers
  • appraisal management companies
  • clients
A

Government Agencies

40
Q

________ has regulatory authority in enforcing the housing requirements in most civil rights legislation.

  • Fannie Mae
  • VA
  • HUD
  • FDIC
A

HUD

41
Q

The Stock Market Crash of ____ (year) and the resulting Great Depression led to widespread turmoil in the country, and untold numbers of jobs and fortunes were washed away. Stocks were the primary culprit, but real property and all other aspects of the economy were impacted.

A

1929

42
Q

The National Association of REALTORS® has been in existence since _____ (year); the organization adopted a Code of Ethics in ______. In the _____ the first groups of organized appraisers appeared.

A

REALTORS® - 1908
Code of Ethics - 1913
first groups of organized appraisers appeared - 1930’s

43
Q

The first document to address appraisal standards was adopted on ___________ (date) in Boston, MA, by the National Association of Real Estate Boards.

A

April 20th 1929

44
Q

By the _____ (decade), professional appraisal organizations were providing education programs and touting codes of ethics, in an effort to project a professional image and foster public recognition and trust in their members. They realized that providing credible appraisal services is important to the general well-being of society and the economy. However, membership in these professional organizations was purely optional. There were no established standards nationwide to articulate what constituted acceptable appraisal practice.

A

1960’s

45
Q

Early in the _______(decade), lending was still being practiced in much the same fashion as it had been for decades. Lending decisions were made at the local level, and each lender had its own ideas of what constituted safe lending practices and acceptable risks in collateral and credit. Most underwriting was done by loan representatives or bank officials. Criteria were developed in-house and were not uniform. Most loans were kept in-house and many appraisers worked directly for lenders.

A

1970’s

46
Q

During the latter part of the ________ (decade), the secondary mortgage market emerged, and served to smooth out the uneven flow of loan funds. Fannie Mae and Freddie Mac developed uniform rules for underwriting, and banking regulators imposed reserve requirements on the lending institutions. The first universally-accepted appraisal form appeared for home equity lending, the 704 Form.

A

1970’s

47
Q

What is 704 Form?

A

The first universally-accepted appraisal form (Fannie Mae and Freddie Mac)

48
Q

History of Mortage Interest Rates

beginning of the 1970s 8%.

1980 13.77%

1981 16.64%

1982 16.09%

1985 12.12%

1986 10.18% (Mortgage borrowing increased significantly during this time, as property owners were happy to refinance their 15% and 16% mortgages down to approximately 10%)

1990 10.13%

A

Nothing to answer, just read the facts :)

49
Q

When was Saving and Loan Crisis?

A

Sales of existing homes surged from 2,973,000 in 1980 to 3,474,000 in 1986. Appraisers were extremely busy, and there were no generally-accepted standards for appraiser performance and ethics. Underwriting standards were lax, particularly with commercial lending. This situation culminated with the “Savings and Loan Crisis” in the mid- to late-1980s.

50
Q

In 1986, eight U.S.-based professional organizations plus one from Canada formed the ___________ on Uniform Standards to develop appraisal standards. Their initial work focused on developing a common definition of “market value,” since we didn’t even have that in the industry.

The committee realized that to gain public recognition of these standards, it would be necessary to form a new, independent organization that would place the public’s benefit ahead of that of any individual or group.

A

Ad Hoc Committee on Uniform Standards

51
Q

FIRREA established the _________________ which is a federal entity with oversight authority over the state licensing and certification agencies.

A

Appraisal Subcommittee (ASC)

52
Q

The Appraisal Foundation has __________sponsors, including Appraisal Sponsors, Affiliate Sponsors, and International Appraisal Sponsors.

A

15 sponsors

53
Q

The Appraisal Foundation has two advisory councils that provide research and advice.

A

The Appraisal Foundation Advisory Council (TAFAC)

Industry Advisory Council (IAC).

54
Q

TAFAC is composed of 61 ________(non-profit or pro-profit?) organizations

A

The Appraisal Foundation Advisory Council (TAFAC) is composed of 61 non-profit organizations and government agencies, which represent appraisers, users of appraisal services and government agencies. TAFAC serves to involve the public in the appraisal standards and appraiser qualifications development process.

55
Q

IAC consists of _______ (non-profit or pro-profit?) members

A

The Industry Advisory Council (IAC) Pro-profit members of the IAC include the following types of organizations: lending institutions, accounting firms, appraisal companies, insurers, brokerage firms, pension funds, investment bankers, relocation companies, and others with an interest in valuation. At the time of this writing, there are 33 members of the IAC.

The IAC frequently identifies and recommends candidates to be considered for appointment to the ASB and the AQB. The IAC also assists the Foundation in identifying and cultivating potential corporate funding sources.

56
Q

Who retains final authority over revisions to USPAP?

  • the Appraisal Practices Board
  • the Appraisal Subcommittee
  • the Appraisal Standards Board
  • the Appraiser Qualifications Board
A

the Appraisal Standards Board

57
Q

Which entity is responsible for appointing members to the ASB and AQB?

  • the Board of Trustees
  • the Appraisal Subcommittee
  • Fannie Maethe
  • Bureau of Consumer Financial Protection
A

the Board of Trustees

58
Q

Which board of The Appraisal Foundation is responsible for revising and editing USPAP?

  • BOT
  • AQB
  • APB
  • ASB
A

ASB - the Appraisal Standards Board

59
Q

True or False? Valuation Advisories, issued by The Appraisal Foundation, provide guidance that is binding on real property appraisers.

A

False - Compliance with the guidance contained in Valuation Advisories is purely voluntary, as these advisories do not have the force of law behind them.

60
Q

Which Foundation advisory council is made up of non-profit organizations and entities?

  • ASB
  • TAFAC
  • IAC
A

TAFAC - The Appraisal Foundation Advisory Council

61
Q

True or False? The requirements of USPAP apply equally to appraisers and their clients.

A

False

62
Q

True or False? Appraisal management companies (AMCs) are required to comply with the requirements of USPAP.

A
  • False*
  • The requirements set forth in USPAP apply only to appraisers. USPAP does not establish standards for other entities, such as clients, intended users, or appraisal management companies.*
63
Q

Which TAF advisory council consists of for-profit entities?

  • TAFAC
  • ASB
  • IAC
A

IAC - The Industry Advisory Council

64
Q

The Appraisal Subcommittee (ASC) ___\_is/is not a federal government entity and ____\_has/has not significant enforcement authority.

A

is

has

65
Q

The Appraisal Subcommittee was created under Section 1103 of ________________ with the following stated duties:

  • Monitor the requirements established by states for the certification and licensing of individuals who are qualified to perform appraisals in connection with federally related transactions, including a code of professional responsibilities
  • Monitor the requirements established by the Federal financial institutions’ regulatory agencies
  • Maintain a national registry of state certified and licensed appraisers who are eligible to perform appraisals in federally related transactions
  • Transmit an annual report to Congress
  • Monitor and review the practices, procedures, activities and organizational structure of The Appraisal Foundation
A

Title XI of FIRREA

66
Q

How is ASC funded?

A

The Appraisal Subcommittee is funded by an annual National Registry fee that is charged to each certified and licensed appraiser. This fee is collected by each state, as part of each appraiser’s license fee, and submitted by the state to the ASC.

67
Q

Who is responsible for auditing the qualification and recertification criteria in the states and territories?

A

The Appraisal Subcommittee is responsible for auditing the qualification and recertification criteria in the states and territories. These are actual onsite audits, conducted in the offices of the various state appraisal licensing and certification agencies by ASC personnel.

68
Q

Whose mission is to ensure that real estate appraisers, who perform appraisals in federally related real estate transactions that could expose the United States government to financial loss, are sufficiently trained and tested to assure competency and independent judgment according to uniform high professional standards and ethics?

A

The Appraisal Subcommittee

69
Q

Federal law requires Appraisal Subcommittee members to be appointed by the heads of the:

  • Office of the Comptroller of the Currency (OCC);
  • Board of Governors of the Federal Reserve System (FRB);
  • Federal Deposit Insurance Corporation (FDIC)
  • National Credit Union Administration (NCUA)
  • The Appraisal Foundation (TAF)
  • S. Department of Housing and Urban Development (HUD);
  • Federal Housing Finance Agency (FHFA); and
  • Bureau of Consumer Financial Protection (CFPB).

Which one does not belong on the list?

A

The Appraisal Foundation (TAF)

70
Q

The Fair Housing Act was originally passed in ____ and was amended in _____. This law prohibits discrimination in housing because of:

  • Race or color
  • National origin
  • Religion
  • Sex
  • Familial status
  • Handicap
A

1968

1988

71
Q

The ______exercises all authority over the establishment of education, experience, and other criteria for licensing, certification, and re-certification of qualified appraisers.

  • AQB
  • ASB
  • ASC
  • FIRREA
A

Appraiser Qualifications Board (AQB)

V_Basic Appraisal Principles (19 decks)

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