Appraisal Review: The Framework

During the course participants will be introduced to commonly used terms and definitions, requirements set by USPAP that effect the responsibility of the appraiser, to underwriting guidelines set by Fannie Mae, Freddie Mac, FHA and VA, which will affect underwriting decisions. In addition, each section and line item of the appraisal forms, used for all loan types and the applicable addendums, will be covered in detail. By the end of the course students will have a clear understanding of how the value of property is determined, what should be expected from the appraiser and, the ability to recognize inconsistencies or red flags as they relate to the determination of value.

During the course participants will be introduced to commonly used terms and definitions, requirements set by USPAP that effect the responsibility of the appraiser, to underwriting guidelines set by Fannie Mae, Freddie Mac, FHA and VA, which will affect underwriting decisions. In addition, each section and line item of the appraisal forms, used for all loan types and the applicable addendums, will be covered in detail.

What will I learn?

Upon completion of the course, students will be able to:

  • Recognize and define common terms and acronyms
  • Analyze the Fannie Mae Market Conditions Addendum form 1004MC
  • Identify and describe the sections and fields of the URAR appraisal report
  • Evaluate appraisals in declining markets and increasing markets
  • Explain the requirements for FHA and VA appraisal reports
  • Recognize inconsistencies and describe actions taken when inconsistencies exist

Participants will be provided a student manual for each of the four sessions.

Participants will be required to complete an assessment at the end of each of the four sessions to assess mastery of the content.

To receive the Certificate of Completion participants must receive a course total of 70% or greater.

Benefits

Upon returning to the office, students will be able to:

  • Participants will have a clear understanding of how the value of property is determined
  • Participants will know what they should expect from an appraiser
  • Participants will be able to recognize inconsistencies and red flags

Agenda

During the course the following topics will be covered:
Session One

  • Data Resources
  • Market Conditions Addendum Form 1004MC
  • Lender Requirements
  • Communication with Appraisers
  • General Updates and Clarifications
    • UAD
    • Seller Concessions
    • Selection of Comparables
    • Verification of Data
  • Depreciation
  • Exhibits

Session Two

  • Appraisal Terminology
  • Forces that Affect Value
  • Neighborhood Life Cycles
  • Highest and Best Use
  • Depreciation
    • Physical
    • Functional
    • External
    • Reviewing the URAR (Page 1)
    • Subject
    • Contract
    • Neighborhood
    • Site
    • Improvements
  • Reviewing for Inconsistencies

Session Three

  • Reviewing the URAR (Pages 2-3)
  • Sales Comparison Approach
  • History
  • Cost Approach
  • Income Approach
  • Reconciliation
  • PUD Section
  • Reviewing for Inconsistencies
  • Certifications and Assumptions and Limiting Conditions
  • Introduction to Condominium Appraisals

Session Four

  • Review of a Condominium appraisal
  • FHA
    • Policies
    • Appraisers
    • Property Standards
    • Review of an FHA Appraisal
  • VA
    • Policies
    • Appraisers
    • Property Standards
    • Lender Responsibility
      • Common underwriting errors
  • Declining Values & Increasing Values

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