Unacceptable Appraisal Practices – Go Direct Lenders

The following are examples of unacceptable appraisal practices:
1. Development of a valuation conclusion based either partially or completely on the race, color or national origin of either the prospective owners or occupants of the Mortgaged Property, or of the present owners or occupants of the properties in the vicinity of the Mortgaged Property.
2. Development and/or reporting an opinion of market value that is not supportable by market data or is misleading.
3. Development of a valuation conclusion based on factors that local, state, or federal law designate as discriminatory and thus prohibited.
4. Misrepresentation of the physical characteristics of the Mortgaged Property, improvements, or comparable sales.
5. Failure to comment on negative factors with respect to the subject neighborhood, Mortgaged Property, or proximity of the Mortgaged Property to adverse influences.
6. Failure to adequately analyze and report any current contract of sale, option, offering, or listing of the Mortgaged Property and the prior sales of the Mortgaged Property and the comparable sales.
7. Selection and use of inappropriate comparable sales.
8. Failure to use comparables sales that are locationally and physically similar to the Mortgage Property.
9. Creation or use of comparable sales in the valuation process when the appraiser has not personally inspected the exterior of the comparable property.
10. Use of adjustments to the comparable sales not reflective of the market’s reaction to the differences between the Mortgaged Property and the comparable sales.
11. Not supporting adjustments in the sales comparison approach.
12. Failure to make adjustments when they are clearly indicated.
13. Use of data, particularly comparable sales data, provided by parties who have a financial interest in the sale or financing of the Mortgaged Property without the appraiser’s verification of the information from a disinterested source.
14. Development on an appraisal or reporting an appraisal in a manner or direction that favors the cause of either the Originator or any related party, the amount of the opinion of value, the attainment of a specific result, or the occurrence of a subsequent event in order to receive compensation and/or employment for performing the appraisal and/or in anticipation of receiving future assignments.
15. Professional Appraisal Practice in place as the effective date of the appraisal.
16. Failure to address and note adverse factors or conditions that affect value or marketability with respect to the neighborhood, site, or improvements.
17. Use of unsupported descriptive comments or drawing unsupported conclusions from subjective observations. These actions may have a discriminatory effect.
18. Use of unsupported assumptions, interjections of personal opinion, or perceptions about factors in the valuation process. These actions may have a discriminatory effect and may or may not affect the use and value of a property.
19. Use of unacceptable terminology including but not limited to:
  - “Pride of ownership, no pride of ownership, and lack of pride of ownership;
  - Poor neighborhood;
  - Good neighborhood;
  - Crime-ridden area;
  - Desirable neighborhood or location; and
  - Undesirable neighborhood or location.”
  - Note: Other subjective terminology that can result in erroneous conclusions is equally unacceptable.