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The appraiser is a frequent or large volume borrower
at the FI.
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The appraiser owns property in the project being
appraised. this is a violation of the appraisal
regulation and raises concerns about appraiser
independence and bias.
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The most recent assessed tax value does not correlate
with the appraisal's market value.
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An appraiser is used who is not on the institution's
designated list of approved appraisers.
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The appraiser is from outside the area and may not be
familiar with local property values. understanding g of
local market nuances is critical to an accurate property
valuation.
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An appraisal is ordered by a party to the transaction
other than the FI, such as the buyer, seller, or broker.
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An appraisal is ordered before the sales contract is
written.
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Certain information is left blank or is inconsistent
such as the borrower, client, seller or occupant.
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The appraised value is contingent upon curing some
property defects, i.e., drainage problems or a zoning
change.
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Comparable are not verified as recorded or are
submitted by a potentially biased party, such as the
seller or broker.
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Old comparables (9-12 months) are used in a "hot"
market.
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Comparable are an excessive distance from the subject
property (more than one mile, unless in a rural area) or
are not in the subject property's general area.
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Comparables all contain similar value adjustments or
are all adjusted in the same direction.
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All comparables are on properties appraised by the
same appraiser.
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Unusual or too few comparables are used.
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Similar comparables are used across multiple
transactions.
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Comparables and valuations are stretched to attain
desired loan-to-value parameters.
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Excessive adjustments are made in an urban or
suburban area when the marketing time is less than 6
months.
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Excessive adjustments for property features such as
design/appeal, view, etc. as these are often
"subjective" adjustments.
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Appreciation is noted in a stable or declining area.
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Large unjustified valuation adjustments are shown,
particularly individual adjustments in excess of 10%
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The land constitutes a large percentage of the value.
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The market approach greatly exceeds the replacement
cost approach.
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Overall adjustments are in excess of 25%.
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Photos do not match the description of the property.
Also, the house number in the photo does not match the
address in the appraisal or the 1003.
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Photos of comparables look familiar.
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Photos reveal items not disclosed in the appraisal,
such as a commercial property next door, railroad
tracks, "For Rent" signs, etc.
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Photos appear to be taken at odd angles (may be
concealing problems).
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Items with the potential for negative valuation
adjustments, i.e. power lines, railroad tracks,
landfill, etc. are avoided in the appraisal photos.
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Loan amounts are disclosed to the appraiser.
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File documentation is inadequate to determine whether
appraisal were properly scrutinized or supported by
additional appraisal reviews.
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The appraisal fee is based on a percentage of the
appraised value.
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Independent reviews of external fee appraisals are
never conducted.
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One or more sales of the same property has occurred
within a specified period (6-12 months) and exceeds
certain value increases (10% or more value increase).
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A fax of the appraisal is used in lieu of the
original contain signature and certification of
appraiser.
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Comparables also appear to be flips or involved in
questionable transactions, with sudden fluctuations in
sales prices (check sales history on tax assessor's
website).
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Sellers or buyers of comparables are involved in more
than one transaction.
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Comparables for homes in a relatively new subdivision
with numerous sales are from outside the subdivision.
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