CAR CAR Legal & Liability Considerations

Question 1

Under FIRREA, which federal regulatory body is primarily responsible for establishing minimum standards for state-licensed and state-certified appraisers?

Accepted Answer

The Appraisal Subcommittee (ASC) in coordination with The Appraisal Foundation

Answer

The Federal Deposit Insurance Corporation (FDIC) independently

Answer

The Consumer Financial Protection Bureau (CFPB)

Answer

The Office of the Comptroller of the Currency (OCC) acting alone

Question 2

An appraiser reviewer discovers that the appraiser on a federally related transaction is licensed but not certified. Under FIRREA threshold rules, this may be a problem if:

Accepted Answer

The transaction value exceeds the applicable de minimis threshold requiring a certified appraiser

Answer

The property is located in a state that only issues licenses, not certifications

Answer

The lender requested a licensed rather than certified appraiser

Answer

The appraiser is a trainee working under a certified supervisor

Question 3

What is the primary liability concern for a reviewer who issues a positive review of an appraisal that was later found to be fraudulent?

Accepted Answer

The reviewer may share liability if they failed to exercise the level of competency expected of a reasonable reviewer

Answer

The reviewer has no liability because appraisal fraud is solely the appraiser's responsibility

Answer

The reviewer is automatically indemnified by their employer's errors and omissions policy

Answer

The reviewer's liability is capped by USPAP to the appraiser's original fee

Question 4

Under USPAP Standard 3, what is a reviewer's obligation when they form their own opinion of value that differs from the appraiser's conclusion?

Accepted Answer

The reviewer must comply with Standard 1 and Standard 2 requirements when developing and reporting their own value opinion

Answer

The reviewer may state their value opinion informally without following USPAP Standards 1 and 2

Answer

The reviewer is prohibited from developing an independent value opinion in a review assignment

Answer

The reviewer must use the same comparable sales as the original appraiser to develop their opinion

Question 5

What does the term 'scope creep' mean in the context of a review assignment?

Accepted Answer

Performing work beyond the agreed-upon scope without client authorization, which may create uncompensated liability exposure

Answer

Expanding a property inspection beyond the exterior to include the interior

Answer

Adding additional comparable sales to the reviewer's report after the initial submission

Answer

Reviewing more appraisals than scheduled in a given billing period

Question 6

Which federal law prohibits appraisers from being coerced, pressured, or bribed by lenders or mortgage brokers to reach a predetermined value conclusion?

Accepted Answer

The Dodd-Frank Wall Street Reform and Consumer Protection Act (including appraiser independence provisions)

Answer

The Truth in Lending Act (TILA)

Answer

The Real Estate Settlement Procedures Act (RESPA)

Answer

The Equal Credit Opportunity Act (ECOA)