Certified Residential Appraiser Practice Exam

If a mortgage borrower receives an appraisal report due to disclosure requirements, what does this imply?

1. The borrower becomes an intended user

2. The borrower does not become an intended user

3. The appraisal is automatically validated

4. The borrower can dispute the appraisal

The correct answer is: The borrower does not become an intended user

Receiving an appraisal report due to disclosure requirements does not make the mortgage borrower an intended user of the appraisal. Intended users are those individuals who the appraiser has identified as being able to rely on the appraisal for a specific purpose, such as lenders or parties involved in a transaction. The disclosure of the appraisal report is often a regulatory requirement to ensure transparency, but it does not inherently grant the borrower the status of an intended user who can rely on the appraisal conclusions for their purposes, such as determining loan eligibility or negotiating home purchase terms. The distinction is important because even though the borrower may receive the appraisal, the appraiser's duty to the intended user primarily lies with the party who engaged the appraiser, typically the lender. Hence, the borrower is usually not considered an intended user just by receiving the report, which aligns with the principles of professional liability and intended use within the appraisal industry.