Appraisal Reviews… Critical for Mitigating Credit Risk

Nov 02, 2016

This article is about the importance of conducting Appraisal Reviews and how the legal environment is creating additional risks for non-compliance with appraisal practice standards and also how that risk is impacting the need to actually formally review appraisals and not just accept them at “face value.” The first step is to define the concept of Appraisal Review. The great majority of appraisers (1.) practice appraisal in accordance with the Uniform Standards of Professional Appraisal Practice (USPAP). Appraisal Review is defined by USPAP as the act or process of developing and communicating an opinion about the quality of another appraiser’s work that was performed as part of an appraisal or appraisal review assignment. Appraisal Review is a critical analysis of the appraisal report measured objectively against USPAP or other established appraisal standards (2.), measured against the logic and evidence presented in the report, and measured against the credibility and to some extent the competency of the appraisers.

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