For a Fannie Mae Form 1004 Desktop assignment, the appraiser cannot establish the subject’s interior condition from reliable information. May the appraiser simply finish using an extraordinary assumption that condition is average?
Correct Answer
B) No; the program bars assumptions about condition or quality
Fannie Mae B4-1.2-02 does not permit extraordinary assumptions or subject-to verification of the subject’s condition, quality, or physical characteristics for this desktop option. The appraiser must determine the information is accurate and reliable and resolve insufficient information through a permitted process. This is a specific program condition; it does not mean USPAP universally forbids every extraordinary assumption in every desktop assignment.
Why This Is the Correct Answer
Option B is correct because Fannie Mae Selling Guide B4-1.2-02 states that extraordinary assumptions or appraisals made subject to verification of the subject's condition, quality or physical characteristics are not permitted. The appraiser must determine that the information is accurate and reliable and resolve any gaps through a permitted process. This is a program condition, not a universal USPAP ban on extraordinary assumptions in desktop work.
Why the Other Options Are Wrong
Option A: Yes; disclosing the assumption satisfies the Fannie desktop rule
Option A is wrong because it says disclosing the assumption satisfies the Fannie desktop rule. The program bars this kind of assumption about condition, so disclosure does not make it acceptable.
Option C: Yes, as long as an AVM agrees with the value the appraiser selected
Option C is wrong because it permits the assumption as long as an AVM agrees with the appraiser's value. AVM agreement does not supply reliable condition information and does not override the program's prohibition.
Option D: No, unless the borrower declines to provide any further information
Option D is wrong because it allows the assumption if the borrower declines to provide further information. The program bars extraordinary assumptions about condition regardless of borrower cooperation.
Desktop: no condition guesses
For the Fannie desktop option, condition, quality and physical features must be known from reliable information, not assumed. If you cannot verify them, the shortcut is closed.
How to use: Use this when a desktop appraisal question offers an extraordinary assumption about condition.
Exam Tip
Separate program rules from USPAP: a program can prohibit an assumption that USPAP might otherwise allow under its conditions.
Common Mistakes to Avoid
- -Believing disclosure makes a prohibited program assumption acceptable
- -Thinking USPAP bans every extraordinary assumption in desktop assignments
- -Using AVM agreement as a substitute for verified condition information
Concept Deep Dive
Analysis
This question tests a specific Fannie Mae program condition for desktop appraisals. The Selling Guide does not permit extraordinary assumptions or subject-to verification about the subject's condition, quality or physical characteristics for this option. The appraiser must instead obtain accurate, reliable information through a permitted process.
Background Knowledge
Clients and programs can impose assignment conditions stricter than USPAP. For Fannie Mae desktop appraisals, the appraiser must rely on accurate, reliable information about the subject, and the Selling Guide bars extraordinary assumptions about condition, quality and physical characteristics.
Real-World Application
An appraiser on a Fannie Mae desktop assignment has only exterior photos and no reliable interior information. Rather than assume average condition, the appraiser contacts the lender to obtain reliable interior information through a permitted source or to change the assignment type.
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