ARA Regulatory Compliance & Legal Framework 2

Question 1

Under FIRREA, which federal agency has primary supervisory authority over appraisals conducted for federally related transactions involving agricultural real estate?

Accepted Answer

The applicable federal financial institution regulatory agency (FFIRA)

Answer

FIRREA designates each federal financial institution regulatory agency (FFIRA) as the primary supervisor ensuring appraisals in federally related transactions meet USPAP and agency standards.

Question 2

A rural appraiser is engaged to value a property that includes wetlands designated under Section 404 of the Clean Water Act. Which statement best describes the appraiser's obligation?

Accepted Answer

The appraiser must identify and analyze the effect of wetland restrictions on market value

Answer

USPAP requires appraisers to identify and analyze legal restrictions such as wetland designations that affect value, though appraisers are not environmental regulators.

Question 3

The Dodd-Frank Wall Street Reform Act added which significant requirement affecting appraisers of properties securing residential mortgage loans?

Accepted Answer

Customary and reasonable fees must be paid to appraisers and AMCs are prohibited from coercing appraisers

Answer

Dodd-Frank's appraisal independence protections require that customary and reasonable fees be paid and prohibit coercion of appraisers by AMCs or lenders.

Question 4

Under USPAP's Ethics Rule, an appraiser who has a personal interest in a property being appraised must:

Accepted Answer

Disclose the interest and decline the assignment unless the client provides informed consent

Answer

The USPAP Ethics Rule requires disclosure of any personal interest or bias and prohibits the appraiser from proceeding without the client's informed consent after disclosure.

Question 5

Which of the following best defines a 'federally related transaction' triggering mandatory USPAP compliance for real property appraisals?

Accepted Answer

A real estate transaction in which a federal financial institution regulatory agency has authority over the financial institution involved

Answer

A federally related transaction is one where a federal financial institution regulatory agency has jurisdiction over the institution involved, triggering appraisal requirements under FIRREA.

(ARA) Accredited Rural Appraiser Practice Test

(ARA) Accredited Rural Appraiser Practice Test

ARA Regulatory Compliance & Legal Framework 2