Which term did Fannie Mae adopt in place of the retired phrase appraisal waiver?
Correct Answer
A) Value acceptance
Why this is correct: Fannie Mae adopted the term 'value acceptance' to replace the retired phrase 'appraisal waiver.' This reflects that the investor accepts a submitted value based on its own data and modeling, rather than waiving an otherwise required appraisal. Why the other choices are wrong: Desktop valuation refers to an appraisal performed without a physical inspection. Property inspection waiver is an older, retired term. Automated underwriting review is a broader process, not the specific term for this concept. Exam tip: 'Value acceptance' is the current term; 'appraisal waiver' is outdated.
Why This Is the Correct Answer
Fannie Mae adopted value acceptance in place of appraisal waiver, reflecting acceptance of a lender-provided value supported by the enterprise's data rather than the waiving of a requirement.
Why the Other Options Are Wrong
Option B: Desktop valuation
A desktop valuation is an appraisal developed without a personal inspection, which is a different product involving an appraiser.
Option C: Property inspection waiver
Property inspection waiver was Freddie Mac's earlier term for a comparable offering, not Fannie Mae's replacement terminology.
Option D: Automated underwriting review
Automated underwriting review is not the term adopted, though the automated underwriting system is what generates the offer.
Accepted, Not Waived
Accepted, Not Waived. The data supports the value rather than excusing a requirement.
How to use: Distinguish the products by who does what: no appraiser, a data collector, or an appraiser working without inspection.
Exam Tip
Value acceptance with property data involves third-party collection without an appraiser, which is distinct from a hybrid appraisal where an appraiser develops the opinion.
Common Mistakes to Avoid
- -Using the retired waiver terminology
- -Confusing value acceptance with a desktop or hybrid appraisal
- -Attributing the Freddie Mac term to Fannie Mae
Concept Deep Dive
Analysis
Fannie Mae replaced the term appraisal waiver with value acceptance, and the change was one of naming rather than substance. Under either label, the offer arises where the automated underwriting system, drawing on the enterprise's data on the property and the transaction, concludes that an appraisal is not required and accepts the lender-provided value. The rename was made because waiver implied that something required had been dispensed with, when the enterprise's position is that its data supports the value directly. Related products sit alongside it: value acceptance with property data, in which a third party collects property information without an appraiser inspecting; hybrid appraisals; and desktop appraisals, in which an appraiser develops an opinion without a personal inspection. Appraisers should know the terminology because it defines the market for their services and because each product carries different scope of work and disclosure implications where an appraiser is involved at all.
Background Knowledge
Fannie Mae replaced appraisal waiver with value acceptance, an offer generated through automated underwriting accepting a lender-provided value. Related offerings include value acceptance with property data, hybrid appraisals and desktop appraisals.
Real-World Application
An appraiser explains to a client that the transaction received a value acceptance offer and no appraisal will be ordered.
More Emerging Methods Questions
How does an alternative inspection method affect the appraiser's disclosure obligations?
A collector's photographs show a condition the appraiser believes needs specialist assessment. What is the appropriate step?
What responsibility does an appraiser retain for an error originating in a third-party database?
Under current USPAP guidance, what is the output of an automated valuation model before an appraiser analyzes it?
Which assignment type still requires the appraiser to develop an opinion of value?
A model returns an estimate far from the appraiser's own conclusion. What is the appropriate response?
What does it mean that a tool cannot comply with USPAP?
An appraiser is asked to review an assignment where an AVM supplied the value. What does the review examine?
Why is the date a data extract was pulled worth recording in the workfile?
A desktop appraisal is best described as an assignment completed how?
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