Recently we received a number of calls and emails regarding USPAP certification requirements. The common theme is that appraisers are being asked to include specific verbiage in their report certification for assignments reported on the Fannie Mae/Freddie Mac forms. Apparently some people are of the opinion that the certification in reports must be verbatim as stated in USPAP. However, that’s not the case. USPAP does state that each written real property appraisal report must contain a signed certification, but the requirement is that the certification be “similar in content to the following form” and then provides a sample certification.
With the exception of the required certification regarding prior services, the certifications in the USPAP sample are all found in the Fannie Mae/Freddie Mac forms. The prior services item is easily handled by using the 2014 USPAP addendum that we designed for ACI (Add/Remove Forms > USPAP 2014 Addendum).
Here is a matchup of USPAP Standards Rule 2-3 to the corresponding certifications found on the 1004 form. View Comparison Table
Another item that some of your clients are asking for is a statement that the report was completed in accordance/compliance with Title XI of FIRREA or complies with the Appraiser Independence Requirements (AIR) from Fannie Mae. Simply stated, this is not a USPAP requirement.
There is nothing inherently wrong with adding certifications as long as you know them to be true. USPAP has no prohibition against “doubling up” on certifications and Fannie Mae states in their selling guide, “The appraiser may not make changes or deletions to the existing certifications; however the appraiser may make additional certifications that can be included on a separate page or form.” Adding certifications that are already on Fannie Mae/Freddie Mac forms does contribute to “report bloat” which is something most of us want to avoid, but some clients won’t be persuaded. In such cases, just make sure what you are adding to the report is consistent with both USPAP and Fannie Mae/Freddie Mac guidelines.
Just so we are clear, the key point of the “nothing inherently wrong with adding certifications as long as you know them to be true” is “as long as you know them to be true.” When you state that your report was completed in accordance with FIRREA or in compliance with AIR you are certifying something over which you have no control. Compliance with FIRREA and AIR applies to lenders, not appraisers. So how can you attest to something you don’t know to be true? You may wish to say “to the best of the appraiser’s knowledge…” or something to that effect, but we recommend you don’t certify that you have complied with something with which you can not comply or fail to comply. There is an AIR compliance form in your ACI software (Add/Remove Forms > Appraiser Independence Certification). You may wish to review it as the language on that form can be modified to use in the event you are asked to state that your report complies with FIRREA.
One final note on client requests related to USPAP Standard Rule 2-3. When the Appraisal Standards Board (ASB) did away with the title of “Summary Appraisal Report” and superseded it with “Appraisal Report” some clients (as well as some appraisers) figured that the use of the term “Summary Appraisal Report” found on the top of page one of the URAR form either became taboo or required further explanation in the addenda. As we stated in an earlier blog, the ASB made it clear in a Q&A that using the term “Summary Appraisal Report” met the new USPAP requirement in that it contained the term “Appraisal Report,” essentially saying that the existing forms from Fannie Mae and Freddie Mac did not need modification or explanation. That Q&A is included in a series of Q&As published in January of 2014.
If you have not yet read it, here’s a link: https://appraisalfoundation.sharefile.com/download.aspx?id=s04d7da1babc462e8