Industry Regulations & Compliance Flashcards
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Read the first 7 Industry Regulations & Compliance flashcards as text
Which USPAP rule prohibits an appraiser from accepting an assignment if the appraiser's compensation is contingent on a predetermined value conclusion?
Answer: Ethics Rule — Management section
The Management section of the USPAP Ethics Rule prohibits contingent compensation arrangements tied to a specific value or direction in value.
A state-licensed appraiser performs a complex residential appraisal that requires a state-certified appraiser under federal thresholds. This situation primarily creates a compliance issue under which framework?
Answer: FIRREA Title XI credentialing requirements
FIRREA Title XI sets the statutory requirement for appropriate appraiser credentialing level on federally related transactions, making this a Title XI compliance violation.
Under Fannie Mae guidelines, an appraisal review (Form 2000) is typically ordered when the original appraisal has which characteristic?
Answer: A value that appears unsupported or where risk factors are elevated
Fannie Mae typically requires a field or desk review when the original appraisal appears unsupported, contains deficiencies, or when risk indicators trigger additional review.
The Uniform Standards of Professional Appraisal Practice (USPAP) are updated on what schedule?
Answer: Every two years
The Appraisal Standards Board updates and publishes USPAP on a two-year cycle (biennial editions).
An appraisal review conducted for a federally regulated lender on a federally related transaction must be performed by an appraiser who holds at minimum which credential?
Answer: A state-licensed or state-certified appraiser
FIRREA requires that appraisal reviews on federally related transactions be performed by state-licensed or state-certified appraisers.
Which section of RESPA (Real Estate Settlement Procedures Act) is most relevant to appraisal fee arrangements between lenders and appraisers?
Answer: Section 8 — prohibition on kickbacks and unearned fees
RESPA Section 8 prohibits kickbacks and fee-splitting arrangements that could compromise the independence of settlement services including appraisals.
A reviewer finds that the original appraisal's effective date is six months prior to the date of the loan application. Under GSE guidelines, this appraisal is most likely considered:
Answer: Stale and requiring an update or new appraisal per age-of-appraisal policies
GSE guidelines (Fannie Mae/Freddie Mac) generally require appraisals to be no more than 120 days old at loan closing, making a six-month-old report stale.