Certification 25 and the Quiet Breach of Appraiser Confidentiality
A peer sent me Phil Crawford’s new podcast episode this morning, and I opened it without thinking much of it because I had assumed his retirement from the show meant he was done weighing in on industry developments. I have been following the news and the chatter around 3.6, but I haven’t been preparing for it. I have not taken any UAD 3.6 classes, have not attended any seminars, have not tested the form, and have not sat down to study the certifications line by line. I know the broad strokes of 3.6 and I know exactly why I refuse to participate in it, but I have never examined the fine print. So when I started listening and heard Phil’s tone shift from casual conversation to genuine alarm, I realized immediately that he had found something significant. Once I saw the screenshots of Certification 25 and 26 that he was talking about, it became clear that I had missed a critical change simply because I had never looked closely at the new “form”.
Most appraisers who follow my writing already know that I will not touch UAD 3.6. I have said it repeatedly and without hesitation. I have written about the direction this profession is being pushed, the fixation on data extraction, and the slow dismantling of the appraiser’s role. I covered it in “Flags Over Facts: The Road to Obsolescence” and again in “The Appraisal Profession’s Perfect Storm: A Veteran’s Take on a Dying Craft“, and everything I wrote then feels even more relevant now. But even with all of that, I had not seen Certification 25. I had no idea that two sentences had been added that fundamentally alter the relationship between the appraiser, the report, and the data collected inside the home.
In UAD 2.6, Certification 21 already allowed lenders and agencies to distribute the appraisal report without the appraiser’s consent. It was broad and uncomfortable, but it did not breach USPAP confidentiality, so appraisers let it stand. The new version in 3.6 keeps that same language but adds something entirely different. It allows the entities who receive the appraisal report to store, copy, reproduce, analyze, use & distribute all of its data for internal or external purposes without ever obtaining the appraiser’s consent. It applies to the entire report, including assignment results and interior photographs. It is not limited to physical characteristics. It is not limited to non confidential information. It is not limited to facts. It is everything.
Phil’s reaction made sense. He pointed out that USPAP requires appraisers to take reasonable steps to protect confidential information, yet Certification 25 asks the appraiser to certify that once the report leaves their hands, the data can be replicated and redistributed indefinitely. He questioned how an appraiser could sign that and still claim to be compliant with the Ethics Rule. He also questioned how any appraiser could believe that the sentence claiming they have no liability for misuse of the report would actually protect them if something went wrong. A certification is not a contract. It is a unilateral statement. It does not shield you when a homeowner discovers their child’s bedroom photos circulating somewhere they never consented to.
Listening to him, I kept thinking about how many appraisers have been told that 3.6 is simply a modernized form. I kept thinking about how many have been told that the changes are harmless or procedural. I kept thinking about how many have been told that the profession is evolving and that resistance is unnecessary. Yet here we are, with a certification that openly permits unrestricted data use by third parties, including agencies and jurisdictions that have nothing to do with the original assignment. Phil even raised the possibility of assessor offices using interior data to justify property tax increases, which is not far fetched in the current climate.
The most striking part of his episode was not the alarm in his voice but the silence he described from the organizations that should be addressing this. He said the Appraisal Foundation has offered no guidance on how appraisers can remain USPAP compliant under Certification 25. He said lenders and mortgage departments are unprepared for the implications. He said the rollout is happening in a matter of days, yet the profession is being asked to sign off on something that directly conflicts with long standing ethical obligations.
For me, this episode confirmed what I have been saying for years. UAD 3.6 is not about clarity or modernization. It is about data. It is about building massive property information repositories that extend far beyond valuation. It is about turning appraisers into data collectors for systems that will outlive the assignment and outgrow the profession. Certification 25 is not a small tweak. It is a declaration that once the appraiser enters the home, everything they document can be stored, copied, reproduced, analyzed, used and redistributed without limitation.
Phil ended his episode by saying that if appraisers sign Certification 25 without challenge, they are agreeing to a new definition of confidentiality. I agree. This is not a technical update. It is a shift in the foundation of the profession. And if appraisers do not understand what they are certifying, they will find out later, when the consequences arrive, that they signed away far more than they realized.
- UAD 3.6 and the Danger of Corporate Pragmatism - October 14, 2026
- Our Metrics, Their Millions: Exposing the Backdoor Data Rush - October 13, 2026
- Inspectors Blocked the Door, Appraisers Handed Over the Keys - October 12, 2026
I think EVERY buyer or borrower on a refi should HAVE to be told this and sign off. I think that would nip this shit in the bud real quick.
AGREE!!!
The reports have been shared with all kinds of people for years. I’m also a broker and see agents uploading appraisal reports into the MLS with all the personal info on them. That’s just one example.
I would encourage all of us to join in with their MLS committee. We have put rules in ours that do not allow appraisals to be uploaded. There is entirely too much information in them to allow them to be shared to non intended users. Of course, the new certification allows it, but we can work wherever we can to not allow publishing.
I think you’re missing the point. In the new form, the appraiser is AGREEING for the appraisal to be used by anybody for anything. How does an appraiser both adhere to USPAP confidentiality rules and then agree to allow all of the details of the report disseminated to anyone for any reason?
Exactly my point. The issue isn’t that reports have been shared before, it’s that 3.6 now has the appraiser agreeing to let anyone store, copy, reproduce, analyze, use & distribute everything in the report. That’s the part that collides head‑on with USPAP confidentiality.
The most interesting point that I see is the inherent pre-printed conflict. The addition of the appraiser agreement for any reader to distribute is clearly our agreement that those folks can rely on that information, and yet the last sentence of proposed #35 states that the appraiser(s) shall have “no liability” for any such uses. It seems to me that such contradictions are a lawyer’s dream. Why in the world would we allow and authorize something we are not liable for? Sounds a little like a quitclaim deed to me, and God help us if the report is deemed ours in litigation. I’m personally rather skeptical of suggesting that it’s OK with me for you to dissect and disseminate my data and that I am, at the same time, not accepting liability for it. Any lawyers out there with a sensible interpretation?
‘Pre printed conflict’.
Let’s check in on the selling guide.
https://selling-guide.fanniemae.com/sel/b4-1.2-01/appraisal-report-forms-and-exhibits#P3591
Fannie Mae will accept the following additional notice or statement when appraisers believe the lender/client is the only intended user:
“The intended user of this appraisal report is the lender/client. The intended use is to evaluate the property that is the subject of this appraisal for a mortgage finance transaction, subject to the stated scope of work, purpose of the appraisal, reporting requirements of this appraisal report form, and definition of market value. No additional intended users are identified by the appraiser.”
Uh oh…. >:(
Cert #25 doesn’t have anything to do with intended user. It only says that the lender/client may disclose or distribute the report. In fact, it states any person or entity who receives a copy of the report does not become an intended user.
Reverse the logic.
If they’re not an intended user, why are they given the report, and all the data their in?
What about Fannie Mae/Freddie Mac, secondary market, other lenders if/when the loan is sold
I’ve said this before, but it’s worth repeating. Uploading an appraisal to the MLS is not allowed under the certification language (2.6 & 3.6). When I’ve seen it happen, I’ve contacted the listing agent directly and let them know they’re violating confidentiality. Every single time, they’ve removed it immediately. I’ve never had any pushback. Most agents simply don’t realize it’s a problem until someone points it out.
Data privacy? In 2026?
https://www.fhfa.gov/data/public-use-database
Phil Crawford did a podcast on this a couple of days ago. Listen to it. I’m not doing lender work anymore. We’re being phased out purposefully by the GSEs and I’m not giving them any more ammunition.
Kim DeFilippis Agree
Not doing mortgage lending work was never, and will never be an effective counter. These programs and technologies, the companies behind them, not stopping at mortgage lending. The national technology and appraisal firms whom function basically exactly as an amc company with an expanded scope, yet assign themselves a different operational title to avoid licensing requirements, are right now soliciting and getting non lender work at volume scale. Over the past several years they’ve captured lending volume from what few non amc’s were left, such as UWM, alongside continued operational integration with appraisers, amc’s, and lenders. We tried to warn what was left of the appraisal community that the billions of dollars these types of companies gained in market share and junk fee raking was being redirected to R&D to replace everyone. Their mission is now accomplished. All appraisers are now on the same time clock. The countdown continues. Do mortgage lending work. Don’t do mortgage lending work. The decision no longer matters in the big picture.
Look at this. They are not even required to have an amc license. They should be. These companies operational activities clearly fall under amc registration requirement guidelines. But, you know, in an industry with no effective enforcement, where the top people in charge of oversight have financial interests if not outright run many of these types of companies, are members of the same trade groups…. Pay to play. There is no penalty for ethical violations if one aligns themselves with these special interests. And if there was enforcement, they’d pick up the phone, rewrite the uspap book on the next bi annual cycle to fit their business interests. That’s where the AI use allowance comes from. It’s where the diluted qualification allowance hails. There is no industry standard other than advocacy for special interest causes. aka; stakeholder interests. Get to know the BOT.
…..and quietly charge borrowers $12 billion dollars in hidden fees to make homeowner’s private information available to anyone.
In 2000 Gram Leach Bliley – allowed banks to transfer private consumer data and information across state lines and ended protections America 🇺🇸 had for 70 years.
By 2008, MISMO had the country in the GFC and there’s been a crisis after crisis ever since. #affordability
Homeowner data use to be kept private by licensees. Professionally, I considered privacy a duty to protect.
I don’t know who the new Pecora might be in Washington but US housing and finance sure needs one. ✅
Proptech is now data drunk. 😵💫
Lori Noble which is why Fannie and Freddie want all the detailed info? What other professional goes into so many homes and sees almost every area of the home?
Lori fit in one of the most insightful, accurate, and hard hitting comments.
All in less than a paragraph. Amazing.
O.k., what’s the solution?
Intended user means nothing.
A few random thoughts.
Always…… follow the money.
They’re thinking (the AMC’s, Fannie, FHA, lenders, Et. al) “Who has the better attorney?” (see follow the $$$)
If an appraiser (you, me or the guy/gal down the street) wants to pay their bills they will shut up and comply.
It was a good run as an appraiser since 2004.
For me……. same as the author…. I will have NO PART of the 3.6 reports.
The end.
I’m with you on this. Cert 25 didn’t surprise me one bit. It had to be there to make the data‑grab machine run. The form collects it, the certification gives permission to pass it around. That’s exactly why I’m out on 3.6. I’m not signing off on a pipeline I can’t control.
CAN WE ADD CLARIFICATION IN THE INTENDED USERS THAT WOULD CONFLICT WITH IT TO CAUSE ISSUES WITH ANY POSSIBLE LAWSUITS AND WHO CAN OR CANNOT USE IT
Spencer, that’s exactly the problem. Any “clarification” we try to add in Intended Users isn’t going to override Cert 25. Once we sign the certifications, we’re agreeing to the full scope of Cert 25, including the part that allows storage, copying, reproduction, uses, analysis & distribution by all those listed entities. Anything we add in the Intended User section wouldn’t be legally binding against the certification we just signed. Cert 25 controls, not our notes.
I too have no interest in participating in 3.6. My sole focus is now private work. That begs the question, is 3.6 going to make the “appraiser shortage” worse? Of course, we all know the appraiser shortage is often really a shortage of appraisers willing to work for breadcrumbs.
I’m betting 3.6 makes that problem worse. There are going to be appraisers like me who simply decide lender work is no longer worth the trouble, others who will want substantially higher fees to compensate for the additional time involved, and probably plenty who will remain on lender panels but become much more selective about the assignments they accept. If lenders and AMCs expect substantially more work for essentially the same fees, the available pool gets smaller whether the licensing numbers show it or not.
My bigger concern is what happens next. I can easily see the powers that be pointing to longer turn times, higher fees and difficulty placing assignments as further evidence that the traditional appraisal process needs to be reduced or bypassed. In other words, create a more cumbersome appraisal process, watch some appraisers leave lender work, then use the resulting “shortage” as justification for more waivers, automated valuation products, hybrid assignments and other alternatives to a traditional appraisal.
And let’s be honest, appraisers have participated in building the very databases and analytical tools that are gradually reducing their role in routine lending decisions. For decades we have supplied enormous amounts of standardized property, condition, quality, comparable-sale and adjustment data. UAD 3.6 takes that standardization much further. The better and more consistent that data becomes, the easier it is for lenders, the GSEs and automated systems to identify the ordinary properties that may not require the same level of human appraisal involvement.
I don’t think appraisers disappear. There will always be complex properties, unusual situations, litigation, estates, divorce, private-party work and lending assignments that require judgment that cannot simply be pulled from a database. But I do think the traditional bread-and-butter lender appraisal is likely to become a smaller part of the profession over time.
Maybe I’m wrong, but 3.6 strikes me as an interesting contradiction. It demands more from the appraiser today while simultaneously producing better structured data that may make fewer appraisers necessary tomorrow.
James, I’m right there with you. What stands out to me is how 3.6 quietly shifts the appraiser’s role from valuation to data‑extraction. Once you redesign the form around granular, machine‑friendly inputs, the long‑term outcome isn’t a mystery… you’re building the infrastructure for a future where human involvement is optional for anything “standard.” The contradiction you pointed out is exactly the tell: demand more human labor today to perfect the dataset that reduces the need for that labor tomorrow. That’s the part too many people are pretending not to see.
And to your point about the broader forces behind this. A colleague said something recently that stuck with me: once you create a system that allows wide distribution of interior data, you shouldn’t assume the pipeline stops with lenders or GSEs. There are plenty of entities that would love access to highly structured property‑level information, & 3.6 builds the mechanism for exactly that.
A simple example: imagine a property data vendor or insurance analytics firm getting access to millions of interior photos, condition ratings, material details, & room by room data, all standardized, all machine readable, all tied to addresses. That’s an incredibly valuable dataset, & 3.6 is the first form that packages it neatly enough to be repurposed far outside mortgage lending. Once that door is open, it’s very hard to close.
While a property data collector, a good AVM and AI analysis may not do a great job, they may eventually do a good enough job in the minds of most lenders and the GSEs. That may be all that matters. Lending decisions do not necessarily require a perfect valuation, only a process that is considered statistically reliable enough to manage risk. Appraisers also need to be honest with ourselves about AI. A lot of us have already started relegating portions of their work to it. AI can make you sound smarter because it does a very good job creating polished narration, explaining adjustments and organizing analysis.
For a seasoned appraiser, that can be a great tool because you generally know enough to recognize when AI is feeding you nonsense. I think the bigger problem will be with today’s trainees and newer appraisers. If they learn to depend on AI before they develop the judgment necessary to recognize when it is wrong, they may never develop that judgment to the same degree. In truth, the more we outsource our thinking, the less capable we become of doing the thinking ourselves, while AI keeps getting better. So we may end up with appraisers becoming increasingly dependent on AI at the same time lenders become increasingly comfortable relying on AI without the appraiser. The movie Idiocracy may eventually be considered a documentary. 🙂 As for me, I’m 70 years old and in the twilight of my career. My concern is for the next generation of appraisers. But let’s be clear, there is little that any of us can do to stop this.
Great commentary James. Yes, all points. How are people going to acquire the skill for complex appraisal, without the relatively simple work to learn in the first place? Imagine day one stepping up to a complex waterfront mansion with a B&B, with only a paper license and your ego. Whip out the tablet and scanning device, make a really good show of it. One has to believe they are a qualified appraiser before they can be qualified appraiser. I’m going to positive my way through this. People like me. I’m good enough. I can do it.
Quote; In other words, create a more cumbersome appraisal process, watch some appraisers leave lender work, then use the resulting “shortage” as justification for more waivers, automated valuation products, hybrid assignments and other alternatives to a traditional appraisal. /
Yep. Same old playbook. Post Millers old cartoon on that one. Same exact thing.
James, this is the entire design and plan all along with 3.6. Create an unworkable solution, divide the industry, blame the providers (appraises), create data for automation processes, present the neww solution, phase out appraisals, insert AI driven valuation assignment, viola, systematic elimimnation of the checks and balances so FNMA /Freddy can keep on making bad loan decisions and no one gets hurt. But the appraiser is now out of the way. THAT IS THE PLAN!
We’re all pretty much in agreement that the GSE’s want to eliminate independent resistance to increased loan production. Debt traps for everyone!
Their day will come. Public sentiment has shifted. Sweeping all the foreclosures away behind the scenes with the Whole Loan Sales program, does not mean the people subjected to these debt traps are not talking about what happened to them.
Something similar to this is happening to every “profession”. The superstition is that “who needs a brain when you have AI?”. And, look at the American public … less educated, more superstitious, unthinking, more and more dependent on the digital whatever. I typically see an article somewhere every day about some Gen Whatever buying a house over the Internet, then getting flayed financially when they actually show up at the house. They don’t care, though. Who are you going to convince that appraisers are needed? Oh, well, I won’t be involved anyway. It was a decent run. It was all over in 2007 for me anyway. That’s when my best client collapsed. I should have never gotten back into appraising. Good luck to you guys and gals who are still fighting the good fight.
The concerns raised about UAD 3.6 deserve a direct, written response from Fannie Mae, Freddie Mac, the Appraisal Standards Board, and the organizations representing practicing appraisers.
As a residential appraiser with decades of experience, I believe modernization must include clear explanations of what happens to the information we collect inside someone’s home. Homeowners and appraisers should understand who can receive that information, how it can be reused, and who is responsible when that use goes beyond the original assignment.
We should also be precise. Broad data-use language does not, by itself, establish that every appraiser signing the report violates USPAP. Overstating that conclusion gives the industry an opportunity to dismiss legitimate questions instead of answering them.
My concern is the gap between the appraiser’s responsibility for collecting and reporting information and the appraiser’s limited control over its subsequent use.
Before mandatory implementation, the profession deserves clear answers:
1. Does the restriction on distributing the report to additional parties also restrict distribution of extracted data and interior photographs?
2. What secondary uses are permitted—including commercial products, AI or AVM development, and uses unrelated to the original mortgage transaction?
3. What notice do homeowners receive, and who obtains any legally required consent?
4. What enforceable obligations govern recipients’ security, retention, redistribution, and handling of sensitive information?
5. What protection does the appraiser actually have against claims arising from downstream uses outside the appraiser’s control?
The Appraisal Standards Board should explain how these provisions interact with USPAP confidentiality obligations. The GSEs should explain the boundaries of permitted reuse. Lenders should explain homeowner disclosures. E&O carriers should explain coverage.
Appraisers should remain accountable for the quality and integrity of their work. Entities choosing to reuse that work should accept responsibility for their own actions.
If those boundaries cannot be explained clearly, the language should be clarified or revised before mandatory implementation. Asking for that is a reasonable professional expectation.
Kenneth J. Mullinix
Certified Residential Appraiser
Yes. If memory serves correctly, there is also language which prohibits the appraiser from making such a claim contradictory to the certifications they’ve signed.
Read further. They also took the three year disclosure rule, misinterpreted it’s intention and meaning, morphed it into a prohibition the appraiser can not provide repeat service within three years.
Article; ‘building massive property information repositories’ / Yes. One of the more difficult aspects of automated process and machine learning is qualifying associated data, insuring it’s accuracy in regard to the actual real property at hand. This is called data mapping. When even one singular point of data is mapped incorrectly this can corrupt the data integrity of entire data bases. It remains one of the more challenging aspects of automated data assimilation, due to the always changing, often different reporting standards and software interfaces. These issues tie into the RESO and MISMO standardization efforts.
The solution appears to be; Have many of these seemingly irrelevant to market value data points that otherwise would need to be mapped in, become a part of the appraisal. The appraisal report appears to be more useful for data assimilation than for loan origination purposes at this point. Placing real property on the block chain. This is also referred to as creating a ‘digital home fingerprint’, or ‘tokenization of real estate.’ The potential for future profit and exploitation of monetized home data could very well exceed profits generated from origination and long term stable loan management. A continuation of smart tech and spyware, now through lending. However they can get into your living room, is however they will get into your living room.
Scope creep. The mortgage lending appraiser now serves a new purpose of assisting data brokers in their efforts to monetize basically every data point conceivably able to be monetized, by way of standard reporting, lidar and 3d image mapping, associated local data pertaining to schools, jurisdictions, down to cable access providers. The 3d home fingerprint needs more data. Of course an open ended data sharing agreement must be included. What good would the data be without one?
From the recently finalized patented software roll outs which facilitate automation, to the plethora of data brokerage, AI focused companies, and national franchised quasi appraisal firm meets appraisal management company hybrid business models which are currently monopolizing the industry. They direct the GSE policy now, re write the appraisal industry standards to suit their interests. Industry entanglements and conflicts of interest. They’ve monetized the front end, the back end, as well as having monetized loan losses if things go south. None of this even pretends to revolve around ethical principals, sound checks and balances, or consumer protection anymore. They’re not stopping at mortgage lending either.
Wrote a piece on that earlier today.
https://appraisersblogs.com/systemic-failures-in-fha-appraisal-n-loan-review/#comment-46957
I plead the 28th updated appraisal certification. Do not pass go. Do not collect a $200 hybrid fee. Go directly to jail. All your data belongs to us. Resistance is futile.
Would love to hear an intellectual property attorney’s opinion on this. I can’t help to think that as an appraiser we have control over the content of our reports, regardless of what form it is on.
Well written Desiree.
I thought about producing a long and detailed response to this. But then I saw that it mostly talks about Phil Crawford. Over the years, Phil has abdicated his right to have a reason response to anything he said because of the amount of crazy, ignorant, and ill informed things that he’s put out there, pretending to be some sort of an expert. Phil was apparently traumatized by somebody in a bank when he was a small child because well we all have issues with lenders that we’ve worked for, Phyllis utterly blinded by the idea that we produce a product for lenders and that lenders actually have a purpose. Phil doesn’t understand the first thing about lenders or banking regulation and it shows with every ignorant thing that ever comes out of his podcast. As an industry, we need to stop listening to these self-appointed experts who only have an audience because they don’t have successful Appraisal businesses and think that this is their only way to make money. I’m glad he’s retired and he should stay retired and stop peddling his nonsense. There are a lot of things wrong with 3.6 and a lot of concerns. This non-issue is not one of them.
Mike, you spent a whole paragraph attacking Phil & never touched the actual issue. Cert 25 doesn’t disappear just because you don’t like the guy who noticed it. If someone wants to argue this is a non issue, they need to explain how an appraiser is supposed to protect confidential information while certifying that the lender & every downstream party can store, copy, analyze, use & distribute the data. That’s the conflict. Whether Phil said it, I said it, or a random appraiser said it doesn’t change the language in the certification. If you want to dismiss the concern, address the certification itself instead of writing a biography about how much you dislike Phil.
I’m entertained! Absolutely!
I think Midwest brought up the point about ‘understanding banking’. Please, allow me to help. Deposit guarantees… One may ponder the reason for the appraisal licensing program in the first place. Applied checks and balances systems to inhibit the known ongoing practices of predatory lending and out of control spending.
The rich irony of the same companies being regulated and restricted, having co opted their regulators, whom then were instructed to write away the regulatory protections which restricted their own predatory behaviors. The people in the industries being dismantled, like appraisers, have developed a sort of stockholm syndrome. Over time with so many incremental reductions of their participatory contributions, having been steadily rewarded for ongoing capitulation over many years, many appraisers really did not notice or care when the death blow finally hit the industry. Rather many actually stand up for the process, defending the lenders and other special interests whom direct the appraisers own business dismantlement and participatory reduction level.
Failure to prioritize consumer protection principals, to not understand the need for regulatory restrictions in the first place, is among the primary reasons why the appraisal industry will continue to experience prolonged retraction and attrition. It is why the appraisal trade groups have become effectively obsolete, having been co opted themselves as well, they answer primarily to stake holder interests rather than the merits of why appraisal licensing exists in the first place. Appraisers have never been and were never in place to defend lenders interests under the GSE system structure. The appraisers participation was required, to fulfill basic checks and balances structural modeling, for financial safeguarding reasons. The principals behind ‘appraisal independence.’ The more modern regulations written as a response to the harm American consumers experienced when financial systems ran amok. Smart and financially responsible lenders would voluntarily use appraisers in their appropriate capacity to provide financial safeguards to their own lending activities. Irresponsible reckless lenders whom dump the risk and losses back to the taxpayer tend to see less value in having appraisers around, have subsequently written out the appraisers formerly routine and robust presence in the lending industry. Banking…
‘It is my opinion that you do not really understand the concept of banking.’
‘A triumph of hope over experience’.
(trying to get both video play boxes to appear at once.)
USPAP says “the Appraiser” or “an Appraiser” must do this or not do that. Certification 25 says “The lender.”
“An appraiser must protect the confidential nature of the appraiser-client relationship.”
It then specifically states that:
“An appraiser must not disclose: (1) confidential information; or (2) assignment results to anyone other than” the client, parties specifically authorized by the client, state appraiser regulatory agencies, third parties authorized by due process of law, and a duly authorized professional peer review committee (subject to applicable law).
If you were so worried about the confidentially rule, and that someone else could eventually see the report and use its information you would never distribute it. You would only allow the client to read the report while you sat with them and then you would leave with the report. You would try to explain that in order to be in compliance with USPAP “the Appraiser” is required to maintain control of the report and all of the data and conclusions. No one else is ever able to see it, use it or maintain a copy of it.
So how can “the Appraiser” adhere to USPAP with certification 25……….. don’t yourself disclose confidential information, just as you have always done.
Brent, I hear you, but this is where your argument breaks down. USPAP confidentiality is not “just don’t personally hand the report to someone you shouldn’t.” The Ethics Rule is about controlling who gets confidential information & assignment results. It’s about making sure that information only goes to the client or parties the client specifically authorizes.
Certification 25 is not passive. When we sign 3.6, we are agreeing that the lender, plus a whole chain of other entities, may store, copy, reproduce, analyze, use & distribute the data in the report. That is an affirmative authorization. We are literally certifying that we consent to broad distribution. That is not the same thing as the lender sharing the report on their own.
USPAP says the appraiser must protect the confidential nature of the appraiser client relationship. It also says the appraiser must not disclose confidential information or assignment results to anyone other than the client or parties the client authorizes. Certification 25 requires us to agree to disclosure to parties who are not our client & who were not authorized by our client. That is the conflict.
Saying “just don’t disclose it yourself” doesn’t fix anything. Once you sign Cert 25, you have already authorized disclosure. You cannot protect confidentiality while simultaneously certifying that anyone in the lender’s chain can copy, store, analyze & distribute the data. That is the part I do not agree with in your argument.
I think you may have contradictive yourself a bit. You stated that USPAP says the appraiser must not disclose confidential information or assignment results to anyone other than the client or parties the client authorizes. But then you say you cannot protect confidentiality while simultaneously certifying that anyone in the lender’s chain can copy, store, analyze & distribute the data. USPAP clearly states parties the client authorizes, you even acknowledged it yourself. So the client can authorize anyone, no USPAP violation on the appraiser.
Meanwhile in the real world. The borrowers assume the appraiser is maintaining confidentiality. They assume such of the lender as well. How does that conversation go now? The confidentiality explanation. Confidentiality, apparently, now only applies to the appraiser and nobody else. Things sure were different when lenders were not sheltered by GSE systems and held these loans in house. The Whole Loan sales program changed everything.
https://capitalmarkets.fanniemae.com/whole-loan-sales
WorkingRE email today / On confidentiality, AO-41 has some of its sharpest language: “Knowing that a system may inappropriately disclose or transmit confidential information and choosing to use it anyway demonstrates a lack of due care and may constitute gross negligence in violation of the ETHICS RULE.” Appraisers entering client data into generative AI platforms without understanding how those platforms handle data should take notice.
Where were they on this topic matter for the past two or more years, as the 3.6 certifications were being formed and available for review and feedback? As another appraiser rightfully pointed out; ‘The entire thing is another grift.’
https://www.workingre.com/ao-41-tafs-new-tech-guidance-and-what-it-means/
When I signed up to be an appraiser I would have never imagined I’d be used as a tool for data brokers building digital home fingerprints for tech companies and aggressive quasi amc franchises who’s primary mission is to shut down independent small 1099 & llc businesses, exploit American citizens at every turn. The ethics rule explicitly says ‘Due process of law’. Who could actually keep up with an entire industry rewriting it’s standard rules every other year at the request of an ever increasing body of special interest influences. ‘Reindeer code’.
https://appraisersblogs.com/reindeer-standards-as-unenforceable-as-appraisal-code/
The irony of appraisers nitpicking the minutia of ‘ethics’ while the entire structure of ethical compliance, the appraisal trade groups behind them, already fully imploded with no meaningful regulatory oversight or course correction. Ethics is about right vs wrong, not technical word compliance with an ever changing code manual. What they are doing is wrong. How they’ve allowed small businesses to be exploited for decades is wrong. Now consumers, again. Ignore the disclosure, never ending conflicts of interests, point to a fluid code that can and will change tomorrow? The peer standard evaporated, along with what was left of ethical credibility.
Brent, the part you’re missing is simple. USPAP says the appraiser can disclose confidential information to the client or parties the client authorizes. That’s true. But Cert 25 does not say the client is authorizing anything. Cert 25 says the lender, plus a whole chain of other parties, may store, copy, reproduce, analyze & distribute the data. Then the appraiser certifies that they agree to all of that.
That means the appraiser is the one authorizing disclosure, not the client. USPAP does not allow the appraiser to authorize disclosure to 3rd parties. Only the client can. So yes, the client could authorize anyone they want, but Cert 25 does not contain that authorization. It contains lender permissions & appraiser agreement. That’s the contradiction.
If Cert 25 actually said “the client authorizes disclosure to these parties,” the problem would disappear. But it doesn’t. It makes the appraiser certify the authorization themselves, which USPAP doesn’t allow. That’s why you can’t protect confidentiality while signing it.
USPAP requires the client to explicitly authorize disclosure, & Cert 25 simply doesn’t do that.
If the appraiser doesn’t disclose any of the confidential info then how does someone else obtain the information …….. from the client, which they can do
Brent, someone else gets the confidential information because the appraiser gives it to the client in the report. The client cannot pass along information they do not already have. They only have it because the appraiser provided it. Cert 25 goes further by having the appraiser agree that a long list of other parties may use, store, copy, reproduce, analyze and distribute that same information. That is not the client authorizing anything. That is the appraiser being required to authorize it. That is the conflict with USPAP.
How do these other entities get the information other than the client giving it to them?
The argument is this creates an illegal work around of due process.
I’m not giving any certifications too much credit. The three year previous appraisal service provided disclosure rule, turned into a certification the appraiser has not provided service within the past three years of the property. Thereby prohibiting repeated valuation service for a three year period. Never what that disclosure rule was meant to accomplish.
As stated in certification guidelines somewhere, they are non negotiable and appraisers can not write them away or supersede any of them with written language elsewhere in the report.
Contrast this to the previous certification regarding intended users. Image attached.
‘May rely on’ Vs the long list of new allowances.
How in the heck can appraisers control any of this? Why would such language be present in the first place? The certification disclosures are there to validate and define the scope of work and duty requirements of the appraiser, not other parties. The previous certification was an acknowledgement to the necessity of report processing for the specific purpose of mortgage lending. It was not an open ended invitation for anyone to treat the report as an owned object or work they could freely disseminate or recreate, with the appraisers associated permission to do so.
The GSE’s have grown entirely too comfortable with dumping everything on the appraisers. It might be slightly challenging to bark mandates in an empty room.
Stop making so much sense Brent.
Brent, they physically get it from the lender, but they get the legal permission to exploit it from the appraiser’s signature.
That is the entire point. If the lender shares the report on their own, that is the lender’s business. But Certification 25 doesn’t just say the lender will share it; it requires the appraiser to sign a document agreeing that third parties have the right to store, copy, analyze, distribute & replicate that data.
Under USPAP, the appraiser has a strict duty to protect confidentiality. We cannot actively sign a blanket, pre-printed clause giving third-party data-miners our professional blessing to redistribute assignment results and interior photos indefinitely. The lender handing over the file is a physical action; the appraiser signing Cert 25 is a unilateral ethical concession. That’s the structural trap,
This may help. The pressure surrounding the rollout of the new UAD 3.6 data standard and the redesigned URAR framework is leaving a lot of appraisers feeling completely trapped. When a government-backed form explicitly states that all the data you gather can be handed over to anyone without your approval, it feels like an outright violation of your professional confidentiality duties. Realistically, telling an independent appraiser to just refuse the assignment is completely out of touch with the reality of running a business; if you walk away from GSE and FHA work, you might as well close your doors permanently.
To protect your business and your license while still signing these mandatory forms, you have to use the built-in legal and tactical safeguards already available to you. First and foremost, you are fully covered by the USPAP Confidentiality Rule itself, which explicitly states that you are permitted to disclose confidential data when authorized by law or regulation. Because Fannie Mae, Freddie Mac, and HUD operate under federal oversight, delivering a completed report through their mandatory digital pipeline is considered legal regulatory compliance rather than an ethics breach. You are simply delivering data to a mandated federal repository, which provides you with an automatic legal safe harbor. Beyond that regulatory shield, you can actively protect yourself against future privacy disputes by shifting the burden of disclosure to the front end of the assignment. By adding a clear, plain-language notification to your initial engagement acceptance or your pre-inspection communications, you put everyone on notice. Once a client or homeowner reads that and proceeds with the assignment, they have legally waived their expectation of total privacy for those data points. You can copy and paste the following exact verbiage directly into your software templates, engagement letters, or pre-inspection notices to establish this shield:
IMPORTANT PRIVACY & DATA TRANSMISSION DISCLOSURE
Please be advised that this appraisal assignment is being completed using the mandatory Federal Uniform Appraisal Dataset (UAD 3.6) and Uniform Residential Appraisal Report (URAR) framework. Under these federally regulated guidelines, this appraisal is transmitted as a structured digital dataset directly to federal repositories and Government-Sponsored Enterprises (including Fannie Mae, Freddie Mac, and HUD/FHA) for risk management and mortgage underwriting purposes.
As a condition of this federal framework, all property characteristics, analysis, and photographs gathered during the assignment become part of this permanent digital transmission. By accepting this assignment, providing property documentation, or granting access for the property inspection, the client, homeowner, and any authorized representatives explicitly acknowledge this regulatory reporting requirement and waive any expectation of absolute confidentiality regarding the data points required to complete and support this report.
Finally, you can protect yourself through smart data management and by pushing liability back onto the lender. If you are handed highly sensitive or proprietary documents, such as complex architectural blueprints or private security layouts, do not physically scan or upload them into the dynamic data fields. Instead, summarize the relevant facts in your own words so you are only transmitting your analytical conclusions. If an Appraisal Management Company or lender insists that you upload specific private data that makes you uncomfortable, get their explicit requirement in writing via email first. Saving that written directive directly into your permanent work file ensures that if a privacy dispute ever arises down the road, you have absolute proof that you were acting under the direct instructions of your client.
MADASHELL, I appreciate the effort you put into laying all this out, but I don’t agree with the core premise. USPAP confidentiality isn’t something we can fix with disclaimers, homeowner notices, or template language. The Ethics Rule is very literal about what confidential information is & who can receive it. It’s tied to the appraiser client relationship, not the homeowner, not the AMC, not the inspection notice, & not any disclosure we create on our own.
USPAP only allows disclosure of confidential information when the client explicitly authorizes it or when a law or regulation requires it. UAD 3.6 & Cert 25 are GSE created program requirements, not federal regulations. They are not laws. So delivering a report through the GSE pipeline does not automatically become a USPAP safe harbor. A GSE requirement is not the same thing as a regulatory mandate.
Cert 25 doesn’t say the client authorizes disclosure. It says the lender, plus a whole chain of other parties, may store, copy, reproduce, analyze, use & distribute the data. Then the appraiser certifies that they agree to this. That means the appraiser is the one authorizing disclosure to parties who are not the client. USPAP does not allow the appraiser to authorize disclosure. Only the client can. That’s the conflict.
The idea that a homeowner can “waive confidentiality” also doesn’t line up with USPAP. The homeowner isn’t the client & has no authority to waive anything on behalf of the lender. So adding a notice to the engagement letter or inspection email might be helpful for communication, but it doesn’t create a legally binding USPAP waiver.
Getting lender instructions in writing is always smart, but it doesn’t solve Cert 25 either. Cert 25 is something we personally certify. We can’t shift liability for something we are agreeing to in our own certification.
I’m not trying to argue with you, just pointing out that the USPAP Ethics Rule doesn’t support the idea that Cert 25 becomes a regulatory safe harbor or that a homeowner notice solves the confidentiality issue. The conflict is still there: USPAP says protect confidential information, & Cert 25 requires us to authorize broad distribution of that same information. That’s why a lot of appraisers are concerned.
Desiree, you got me on this one. Plain and simple. I was trying to offer working appraisers a practical way to navigate the UAD 3.6 rollout, but after taking a hard look at the points you raised, I digress. You’re 100% right on the law: GSE guidelines aren’t federal statutes, homeowners have no legal standing to waive client confidentiality, and custom template disclaimers can’t rewrite the Ethics Rule or erase what we personally sign in Cert 25.
I appreciate you pulling no punches and laying out the strict legal reality. It highlights the massive structural trap the GSEs and ASB have left us in, and calling out that flaw directly is the only way our industry gets real clarity from the powers that be. Thanks for bringing such sharp analysis to the table and calling it like it is.
MADASHELL, thanks for the thoughtful response. Honestly, I would’ve preferred you be right instead of me because it would make this whole mess a lot easier for working appraisers. I wasn’t trying to tear down your idea, just lining it up with what USPAP actually says. The fact that your workaround should solve the problem but legally doesn’t is exactly why this rollout feels like a trap.
He’s got some great language. I’m saving that. Imagine being a consumer going through the process, having to read and agree to terms like that?
These are the sorts of issues that every day workers should not be having to debate in an intelligently designed stable system with competent trade group management. GSE’s have gone off the rails with these changes. The appraisal trade groups might as well not even exist for all practical purposes as far as residential appraisers are concerned. Most appraisers agree, which is why most are not happy, the free fall of licensee attrition continues unabated.
This industry has resorted to tricking unsuspecting part time gig workers into fast track bait and switch licensing programs. They have been immediately exploited by the education providers before they even get a license. A fitting start, because that’s where it will end for most of them anyways. The future attrition rate will increase. Most people are not going to even bother trying to figure these things out and will simply pass for a better managed industry with less outright corruption and contradictory guidelines. Even amc’s can’t convince their own staff to want to acquire appraisers licenses, even with the fast track allowances. They will soon resort to billboards and magazine advertisements, the help wanted jobs listings for licensed appraiser positions are not going anywhere either. The grifting continues.
This thread was entertaining. Thanks.
I am joining you. I should have done this ten years ago realizing there was no future in this. I know I can make much money serving in a different capacity. Appraisals have been a dying business before it was started. No one cares. The banks control everything. But there may be a day much sooner now where they will really screw this up. My next opportunity will be with one that requires no redundant classes! At 67 I still have some life in my blood. i realized I wasted my time doing this. The fees well they have not kept up with inflation.
Joe, in all fairness, appraising and appraisers are alive and well. What’s totally screwed up is traditional lender appraisal work. There is still plenty of demand for competent appraisers in private work where clients actually value experience and judgment.
Joseph, just to clarify, I’m not quitting appraising. I’m only refusing 3.6 for any client that requires it. I have plenty of private work, honestly more than I take because I also do VA. If or when VA goes the 3.6 route, I’ll just switch to 100% private. My private fees are higher than VA’s $700, & VA is already considered a fair fee by most appraisers. So staying private would be completely fine for me. I’m staying in the business, just not touching 3.6. Everyone’s path is different, but that’s how I’m handling it.
Amen Sister!!! Come into the totally private pool. I never trusted public pools anyway… 🙂
National franchise appraisal firms whom also function as unlicensed amc’s just hopped into the pool with you. They brought their lawyers, lobbyists, advocates, salesmen, a squad of fast tracked newly minted appraiser licensees with them. Is that your private client they are talking to right now?
The time to reign in this model was the last decade. Tomorrow is already too late.
Amen
Private work, while okay for a while, has a limited life – maybe shorter then you think. It is my understanding that AMC’s are also making inroads into private work. AMC’s being well financed (partly by appraisers), their slick & polished marketing/sales teams would likely be appealing to private users and their clients. So, for the principled (non-AMC) appraiser involved in say litigation; they may be fighting the opposing appraiser who is backed by an AMC and all their overwhelming “data” even if the data is not appropriate and/or deficient. Even if the good appraiser is in the right – they may not appear that way – toxic even. AMC’s will build on each of their successes. .
I can see AMC’s taking over all types of private work including assessing functions This could result in property owners being reluctant to appeal their assessed values because the assessor is backed by an AMC and a massive (so called) data bank. And this may lower assessing costs for municipalities by doing away with much of the assessing staff and associated expenses
Time will tell. Don’t be surprised when private work takes an unexpected turn, hopefully not in the middle of litigation.
I won’t go into detail because I don’t want to provide ideas for AMCs
All types of Commercial appraising is also on notice.
What a day. Image.
Tick Tick Tick… That may be true, but I think it will be many years before AMCs, AVMs or AI are equipped to handle more complex appraisal assignments well. We all know there are things we pick up at a property that simply don’t translate into photos: the feel of the neighborhood, smells, noises, deferred maintenance, odd layouts and all the little things that affect how a buyer might react. Human analysis is still very necessary.
Will that still be true in 10 years? Maybe not. But as a semi-retired appraiser, I only need four or five assignments a month to meet my needs, and there are still enough people who want the human touch to keep me busy. Your point about county assessors’ is very valid, though. They really are much more dependent on big data and mass appraisal techniques. My concern is not for me, it’s for younger appraisers that are investing significant time and money into a profession that may not be fruitful in the long run.
We Appraisers are long past overdue – we should have banded together long ago and lobbied to make AMC’s ILLEGAL. Any Lender to stupid to have an Appraisal Department is to dangerous to be in the lending business to begin with.
As most of you have heard by now, FNMA & Freddie finally blinked. The GSEs just threw a lifeline to an industry that was sprinting toward a brick wall. They announced a policy exception that pushes the hard cutoff for the legacy UAD 2.6 forms all the way out to May 19, 2027.
Of course, in classic GSE fashion, they refuse to call it a delay. They are still insisting the November deadline is real, but lenders can now ask for an exception. The catch is simple. If a lender drags their feet past March 1, 2027, their legacy reports get hit with a 999 risk score in Collateral Underwriter & their representation & warranty relief disappears. It’s the usual mix of pressure & incentive.
The software situation is its own comedy. ACI has essentially pulled the plug on the initial rollout. Instead of updating their desktop software, they are trying to move everyone to their new web platform, ACI Sky Workbench. The word is they will not be fully operational until well into 2027. If you rely on ACI, you are stranded for now, stuck waiting or switching vendors just to keep working.
Meanwhile, the message in this article is spreading fast. Several state boards are now putting the Cert 25 issue on their agendas. Regulators & panels are starting to recognize the confidentiality problem & the size of the loophole it creates.
The truth is simple. No one is ready for this. Not the GSEs, not the software vendors, not the appraisers & not the lenders. We are heading into a messy transition where we will be juggling both formats depending on how unprepared each client is.
Desiree… the GSEs seem to be tossing a lifeline to some lenders, but notice there’s no similar lifeline for appraisers. I can’t help wondering whether they fully expect the disarray that’s coming. If the transition turns into a mess, it would be very easy to point to appraisers and the appraisal process as the problem and use that as further justification for eliminating more traditional appraisals.
Meanwhile, appraisers are being marched toward the slaughterhouse. We were blamed for 2008, we’ll probably get blamed for whatever problems 3.6 creates, and before long somebody will figure out how to blame us for the national debt and climate change too. Same old story…
Has anyone noticed that when you work with the 3.6 new forms you cannot merge a 3.6 major form with the old 2.6 templates you used so all that additional information, scans, marketing graphs, tax records, your license and E and O pdf’s you cannot download into the new form? Also there is no photo button you will have to download drop and drag every photo separately one at a time not all at once. I could go on and on and I am just getting started on a temple. This is going to be total chaos with they roll this new form out for good. I can see days of work to get out a new report.
The fees for the new 3.6 should be 3.6 times the fee we charged for 2.6.