A certified appraiser developing an appraisal for a lender runs an AVM as a check on the analysis. Under the 2024 AVM quality control rule and its preamble, which statement is correct?
Correct Answer
D) The use is excluded, and the value must be supported independently of the AVM
The rule excludes AVM use by a certified or licensed appraiser in developing an appraisal, partly because appraisers must still produce credible results under USPAP. The agencies stated that the appraiser's value conclusion must be supportable independently and not rely on an AVM to determine collateral value. Option C draws the wrong lesson from the exclusion, and options A and B ignore it.
Why This Is the Correct Answer
Option D is correct because the rule excludes AVM use by a certified or licensed appraiser in developing an appraisal. The agencies explained that an appraiser must reach a value conclusion that is supportable independently and does not rely on an AVM to determine the collateral's value. The AVM may serve as a check, but the appraiser's own analysis must carry the conclusion.
Why the Other Options Are Wrong
Option A: The use is covered, so the lender must apply its AVM quality controls to it
Option A says the use is covered and the lender must apply its AVM quality controls to it. The rule excludes appraisers' use in developing appraisals, and the agencies noted it would be impractical for lenders to impose controls on AVMs used by the many independent appraisers they engage.
Option B: The use is covered, because the appraisal supports a mortgage credit decision
Option B argues the use is covered because the appraisal supports a credit decision. Although the appraisal does support a credit decision, the rule expressly carves out an appraiser's AVM use in developing the appraisal.
Option C: The use is excluded, so the appraiser may adopt the AVM figure as the value
Option C correctly notes the exclusion but concludes the appraiser may adopt the AVM figure as the value. The exclusion exists because appraisers must independently support their conclusions, so it gives no permission to substitute an AVM output for the appraiser's analysis.
Excluded, not excused
An appraiser's AVM use is excluded from the rule, but the appraiser is not excused from supporting the value independently.
How to use: Use this phrase when an answer choice treats an exclusion from the AVM rule as permission to rely on the AVM figure.
Exam Tip
When a rule excludes a use because another standard already governs it, the other standard still applies in full.
Common Mistakes to Avoid
- -Reading the appraiser exclusion as permission to adopt AVM values
- -Assuming lenders must control AVMs used by fee appraisers
Concept Deep Dive
Analysis
This question has two steps: decide whether the appraiser's AVM use is covered, and then decide what the exclusion does and does not permit. The exclusion rests on the appraiser's own duty to reach credible, independently supported results, so it does not loosen appraisal standards. The best answer combines the exclusion with that continuing duty.
Background Knowledge
Appraisers may use computer-assisted tools, but USPAP requires credible results and an understanding of any tool relied on. The AVM rule treats appraisals differently from evaluations because appraisals are already subject to USPAP and appraiser credentialing, whereas AVMs used in preparing evaluations are covered.
Real-World Application
An appraiser finishes a sales comparison analysis and then checks a subscription AVM, which comes in 6 percent higher. The appraiser rechecks the comparables, finds the analysis well supported, and reports the appraiser's own conclusion rather than moving toward the model figure.
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