UAD 3.6 Erases My Legal Defenses: Insurance Industry Agrees
The insurance industry just verified the erasure of my legal defenses under UAD 3.6. The corporate apologists and tech insiders have spent weeks trying to downplay the Certification 25 confidentiality crisis. They’ve lined up to tell independent appraisers that the new language is just a passive weather report, a routine disclosure, or an innocent acknowledgement of a reality that has existed for many years. But the ultimate reality check just arrived from the very people who calculate risk for a living, and it completely blows the corporate defense strategy out of the water. Isaac Peck, Publisher of Working RE Magazine and President of OREP Insurance, just dropped a comprehensive historical breakdown tracking the twenty year fight over who gets to use your appraisal data. While the piece serves as a broad look at the industry, hidden right inside his risk analysis is a massive admission that completely destroys the corporate narrative and hands us the ultimate proof that Certification 25 is a glaring professional trap.
To understand why this insurance perspective is so devastating to the apologists, you have to look at the historical foundation Peck builds in the early sections of his piece. He takes readers back to the 2005 debate when the legacy UAD 2.6 forms were first introduced and appraisers worried about Certification 21. Back then, software corporate counsel and industry experts successfully argued that the phrase “disclose or distribute” was strictly a passive distribution allowance. It meant the physical report could move down the line as a limited use license tied to a single mortgage transaction, but the client never owned the underlying intellectual property. In fact, Peck points directly to a landmark federal court case where an independent appraiser stood his ground, sued, and successfully won a copyright injunction against unauthorized data users. Under the old 2.6 rules, the appraiser retained full data ownership and legal control because the old certification was never an express written agreement giving third parties permission to mine, scrape, or replicate proprietary analytics.
That historical context is exactly why the new UAD 3.6 framework changes the legal playing field entirely, and it perfectly verifies everything I stated in my original article regarding the TAF abdication. The GSEs did not just cleanly paper over the document for fun. They added aggressive, active verbs like store, copy, reproduce, analyze, use, and distribute to secure the exact express written contract they lacked for the last twenty years. The forum apologists love to play semantic games and argue that the phrase “without having to obtain the appraiser’s consent” means the appraiser isn’t doing anything active. But as an insurance expert looking at actual liability, Peck cuts straight through the noise and exposes the trap by stating: “At OREP Insurance, our view is that Certification 25 does not increase the chances of a claim against the appraiser, but it removes the appraiser’s “I didn’t authorize that specific use” defense, if a claim were ever to surface.”
Think about the regulatory and legal weight of that admission. If Danny Wiley and TAF were correct that Certification 25 is just a passive observation of what a lender does after delivery, it wouldn’t impact an appraiser’s legal defenses in the slightest. The only reason it strips away our primary defense is because our signature on that form transforms a passive leak into an active, certified grant of prior consent to non intended users. And that active signature is exactly where the USPAP Ethics Rule violation happens. Under USPAP, we’re strictly mandated to take reasonable steps to safeguard our confidential data and restrict its use to identified intended users. By confirming that our signature legally removes our primary defense against unauthorized downstream distribution, the insurance sector just verified that the appraiser is actively greenlighting the data release to non intended users at the moment of signing. We cannot claim we’re safeguarding confidentiality while simultaneously signing a document that legally strips away our right to restrict that use.
This legal reality bookends the crisis perfectly, especially as state appraiser boards prepare to tackle the loophole. When you sign Certification 25, you’re not just signing a report, you’re signing a blanket, royalty free waiver that retroactively clears big tech and data aggregators of liability for exploiting your intellectual property while systematically stripping away your legal defenses. Worse yet, as an E&O provider, Peck openly admits that standard appraiser policies aren’t built to handle pure consumer privacy claims if a homeowner sues over their interior data being distributed without their knowledge. Independent appraisers are being forced to sign a legal warranty they have no authority to grant, since we do not own the property owner’s consumer privacy rights. The insurance industry just confirmed that the apologists are wrong, the contract loophole is real, and independent business owners are holding 100% of the liability line.
- Flock Camera Blunders and the Privacy Risks of UAD 3.6 - October 22, 2026
- Surviving UAD 3.6: Secondary Market Risk Protocols - October 19, 2026
- The MLS Interior Photo Blackout & UAD 3.6 - October 16, 2026
Was on a webinar yesterday with Fannie Mae, and this was brought up and he fully defended it, saying it has not changed. And it’s always said that which we all know it has not. It was brought up and pretty much pushed to the side.
I’ve been saying for years. The problems we deal with today are a result of allowing Lender and Agent member a position on appraisal regulatory boards. They should have no input in the process. In the end they want no protection for the borrower rather. EVERY loan is supposed to close. Regardless of the risk they put on the homeowners finances.
So what can we do about it?
Elissa Ann best thought I’ve had, and it’s not necessarily a good one, is add a supplemental certification addressing #25 like we do for #23 in a 2.6 form. Where should we add it? Good question!
Paul Collins appraisers cannot change certifications.
Donna Halfpenny that’s what they said about 2.6. Like I said, it’s a thought, not guaranteed to be a good thought. What’s your idea?
Paul Collins don’t do 3.6. That is all I have. This is insane garbage. Everything is always biting the appraiser, but every other entity gets constant passes.
Paul is referring to this guidance page. Image attached.
Working RE: First, Certification 25 doesn’t remove the appraiser’s copyright or intellectual property rights to the appraisal with respect to every single third party under the sun. Certification 25 is a limited release to third parties that the lender/client has specifically selected and authorized. /
I’m a consumer and I’ve just read this disclosure in my appraisal for my new home loan. I immediately call the appraiser inquiring about a data opt out. Appraiser does not know what’s going on or who gets the data. I call the mortgage origination team. They don’t know, that’s a different department. I call the GSE and FHFA, they don’t know, refer me back to the lender. How am I as a consumer supposed to navigate this issue and regain my data privacy? Where is my advocate? Where is my opt out notice and instructional guidance that should have ridden directly alongside the data sharing disclosure notice in the same or following certification?
Well said!
How did this suddenly become the appraisers responsibility? If the form is interactive I should be able to ask the home owner if they agree to data sharing and if I check the no box, that certification disappears, just like the three year disclosure rule comment.
At a minimum if my reports are going to have this language, I should be able to explain the details to the home owners who exactly is using the data. Previously I could explain this in a simple manner, only for the purpose of mortgage origination or review, loan servicing.
Not anymore. Too many tech companies involved. The new age of data brokering where selling consumers data often brings more income than the act of selling them the product itself.
This is not the appraisers responsibility to disclose these things. If the lenders are using the data, and the appraiser has no say in the matter, these are disclosures the lenders should make elsewhere outside of the appraisal report.
Elissa Ann that’s my question…
If it violates USPAP, then as an insurer what does OREP say we do about it? Couldn’t this knowledge make our insurance rates go up as well?
We need to add a supplemental certification.
Add a supplemental certification. That’s going to be page 67 of the updated uad 3.6 guide. ‘Lenders are responsible for reviewing any additional certifications made by appraisers to ensure that they do not conflict with Fannie Mae’s policies or standard certifications in the appraisal report’ / Define; Conflicting certifications
https://singlefamily.fanniemae.com/media/42571/display
OREP is my insurer. How do we reconcile this with USPAP since it contradicts the Ethics Rule? Out of everything to come out of 3.6, this terrifies me this most.
It contradicts USPAP and signing off on certification 25 means you are in violation, as it is written and could be used against appraisers. Fannie and Freddie’s fancy lawyers do not have to follow USPAP only appraisers do.
Dean Kelly Did you miss the Foundation’s response that was included in the last AB post? USPAP applies to the appraiser’s vivacity, not the client’s behavior.
Danny Wiley the foundation has not represented our interests for years. I don’t think any appraiser would respect any guidance they are providing.
Kathleen Bunting Hoey except that, you know, that small matter that they write USPAP so their interpretation of it is kind of the final word.
Kathleen Bunting Hoey it is not a matter of respect. It is a simple matter of what USPAP actually says
Dean Kelly Did you miss the Foundation’s response that was included in the last AB post? USPAP applies to the appraiser’s vivacity, not the client’s behavior.
Desiree, I’m sure you disagree with me, but I want clarify OREP’s position since you’re characterizing it extensively:
• OREP sees this language as being more about the appraiser’s intellectual property than a liability question. Lenders have had the ability to share your appraisal with third parties for 20 years.
• OREP doesn’t see Certification 25 increasing claims against appraisers, and there have been no claims against OREP-insured appraisers around this for the last 20 years. (We serve 10k appraisers annually.) Another way to say it: Under Certification 25 the appraiser is operating with one fewer defense against a claim that has never happened (to our knowledge), alongside exposure that has existed all along.
• This language is not a hold harmless or indemnity agreement where the appraiser agrees to take liability for the lender or third-party providers—the lender and its vendors are bound by BROAD privacy laws, have way deeper pockets, and would be primarily responsible in the event of a breach. Certification 25 doesn’t shield them from liability or shift that liability to the appraisers in any way; it just licenses them to use the appraiser’s data. (They’ve been using it for the last 20 yrs, in any case.)
>>I’d encourage appraisers to read my full article which addresses many of the other items discussed here.
Link: https://www.workingre.com/certification-25-the-20-year-fight-over-who-gets-to-use-your-data/
Isaac, I appreciate you joining the discussion & clarifying OREP’s position. You made a huge admission here that actually seals my entire argument. By stating that Certification 25 “just licenses them to use the appraiser’s data,” you’re openly confirming that this is an active grant of permission by the appraiser.
That’s exactly where the USPAP confidentiality violation happens. An appraiser cannot legally grant a commercial license to distribute confidential assignment results to an entire chain of non intended users at the moment of signing. You can’t claim we’re safeguarding confidentiality while simultaneously signing a blanket licensing waiver for our data.
As for the lack of past claims, of course there haven’t been any claims over the last 20 years under the old forms. Under UAD 2.6, the appraiser remained completely passive, & any downstream data sharing was strictly on the client. But UAD 3.6 changes the entire legal framework by forcing our active signature upfront. You admit this removes a key defense, & operating with fewer protections in a world where tech companies are actively racing to monetize homeowner data is a massive gamble for independent businesses. The fact that lenders have deep pockets won’t stop a state board from coming after an appraiser for failing to safeguard access to their work product.
I have thus far refused 3.6 orders. Not sure how else to proceed…
Lawyers; buy more insurance. In cyber referred to as ‘wrongful use of data’, different then regular cyber insurance. The opportunistic rush to settlement suits for data misuse are only now getting started. Found an interesting article on the matter. Remember how many lawyers came out of nowhere for fictitious appraisal bias claims?
https://www.insurancebusinessmag.com/us/news/cyber/wrongful-data-collection-exclusions-are-spreading–what-brokers-need-to-check-in-cyber-policies-586330.aspx
/This dynamic makes underwriting questions around data practices increasingly important. Gittler pointed to questions including what data a company collects, how long it keeps that information, whether customers are informed, whether information is shared and what safeguards govern third-party vendors./
Safegaurds to govern third party vendors? Who’s going to have the appraisal data? What vendors? Where? How many? For how long? Are there similar certifications in hybrid reports where PDC’s are involved? What safeguards are in place for data they collect? If the GSE’s are already covered by such a broad rule set, why would they need the appraiser to sign such a certification in the first place?
When does consumer privacy come back into this conversation? As consumers we object. We don’t want these companies owning our data forever, for a one time access to a financial instrument or purchase. We demand the right to be forgotten, data privacy now. They do not need this much data to originate a loan. They’re monetizing the consumer and home data, that is clearly what all of this is about.
Talk about the three year disclosure rule. It is morphed into a prohibition on repeat service within three years. Appraisers were supposed to have the alternative option of simply disclosing, yes, I have provided valuation to this property within the past three year period.
For #29 in the Certification, it depends on whether you select Yes or No for the Prior Service Performed question. The Cert changes based on your answer.
Thanks, good to know. Now we have changing certifications. Is that the only one that changes? Is there an option for the appraiser to show the net/gross combined figures alongside the adjusted value indicators? The clients I’m working with don’t want 3.6 but will probably be forced to use it anyways. The classic one page appraisal grid is what makes sense for the tasks at hand, and everyone knows how to read it. Will appraisers be able to include at least large images or pdf attachments onto the back or front end of the 3.6? I’m talking the need to include 30 to 50 page standard reports on top of the 3.6.
I’m on my 2nd 3.6 report. You can’t attach pdf’s but can convert a pdf to a PNG file and attach as an exhibit. I’m not sure if there is a limit to the number of pages or size an attachment can be, but there are many areas in the report you can attach exhibits.
Cool. Extra time consuming working steps with the need for additional software conversion utilities. Nice. The appraisal modernization effort is shaping up to be extra extra modern.
I’ve sat at this desk and wondered if I still had the strength and skill to karate chop this thing straight in half with one blow. I’ve thought about that for a long time. Do a combo move and see if I can also stomp the PC and monitor.
I want to go back. This timeline sucks.
Said it before. I’ll say it again. And I’ll keep on saying it.
I’m not doing 3.6 Reports.
Good luck to those of you that do.
The end.
Most appraisers assume USPAP confidentiality protects the data we collect. It mostly doesn’t. The Ethics Rule restricts disclosure – and it yields to anyone the client authorizes.
Certification 25 is that authorization. Broad, non-negotiable, and extending to storage, analysis and redistribution of your report data for external purposes, without your consent. We need to reevaluate more than just this new certification.
Intended use and intended user limit who may rely on your opinion of value. Nothing limits who may use the data you gathered to reach it. That gap was always there. UAD 3.6 just showed us how wide it is.
And don’t assume the states will backstop it. The Senate rejected a 10-year ban on state AI regulation 99-1, then the Trump administration went after the same result by executive order, a DOJ task force to challenge state AI laws, with federal funding tied to compliance. Whichever way you lean politically, the direction of travel is fewer guardrails on what gets done with data, not more.
Two questions worth asking your clients: is this breadth a reasonable assignment condition when you can’t modify or decline it – and are borrowers being told, in plain language, before you ever knock on the door?
Indeed. We’ve moved into the space where we as individuals must make personal ethical choices. If we are willing to be a part of this invasion of privacy and data monetization industry.
I was quite comfortable assuring people that the photos I was taking of their personal home spaces were strictly confidential, only for the purpose of mortgage lending. How am I supposed to have an honest conversation about an open ended data sharing agreement I was forced to sign if I wanted to continue working, have no information or knowledge who gets their data, how long it will be retained, or anything else? Any reassurance we give them, if we do, would be a lie. Arguing the details of uspap compliance becomes irrelevant. As a consumer I do not want this happening to me. That’s where the line is.
I have had homeowners refuse to allow certain photos to be taken or shared out of concern with valuable collections, and similar. Then the lenders get “fussy” because we are missing a photo. If I cannot tell my homeowners that their photos are safe, honestly, then I will have to explain their right to refuse a photo to be taken. Frankly, I would be honest with the homeowner and have to state that everything has changed, and I have no idea if their information is shared outside of the lender/mortgage cycle nor whether it remains private or safe. I’m not going to lie to people to protect those who could care less about us as appraisers..
Desiree, I wholeheartedly agree that appraisers should take this signature requirement seriously. **I will not bid on, accept, or complete a single UAD 3.6 assignment with Certification 25 in its current form.** My signature, license, and livelihood are too important to commit to language whose consequences remain disputed.
Isaac Peck’s analysis gives me further reason to stand firm. OREP says Certification 25 does not increase the likelihood of a claim, while warning that it removes the appraiser’s defense that a particular use was never authorized. He also identifies uncertainty about E&O coverage for claims alleging only a privacy violation. Those are concerns I cannot dismiss when deciding what to sign.
Before expecting my participation, the organizations requiring this certification need to provide clear written answers about permitted downstream uses, homeowner privacy, responsibility for misuse, and insurance coverage. A rollout deadline does not answer any of those concerns. Neither does telling appraisers that data sharing has been happening for years.
I own an independent appraisal business. I decide which assignments and contractual terms I accept. No AMC, lender, software company, or industry organization gets to make that decision for me. Higher fees would not resolve my objection to this certification. **Under the current language, my answer is no.**
Can appraisers add a comment to the Certifications to help clarify the issue?? There is a place on the form to add additional certifications.
Anything that can go wrong, will go wrong.
Murphy
I see USPAP being revised to accommodate the pressures from political and private sector parties that undoubtedly will be forthcoming. On another note, I’m surprised the literary profession is not up in arms as this “slippery slope” has potential to boil over into their respective interests.
Thankfully, I don’t have to subject myself to the career self-immolation that residential appraisers are facing with this new form and certification. I would test the certification with a prominent statement: “All market information, including sales data provided in this analysis, is protected by U.S. copyright law to the extent it is not in the public domain. The release of this information to any third party for any purpose outside of this specific appraisal assignment is expressly prohibited. No liability is assumed or accepted by me for any unauthorized use of the information.”