CAR Financing & Lending Standards in Appraisal Review

Question 1

Which federal legislation established Appraisal Independence Requirements (AIR) to prevent improper influence on appraisers in mortgage transactions?

Accepted Answer

Dodd-Frank Wall Street Reform and Consumer Protection Act

Answer

Real Estate Settlement Procedures Act (RESPA)

Answer

Truth in Lending Act (TILA)

Answer

Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA)

Question 2

Under Appraisal Independence Requirements (AIR), which individuals are prohibited from selecting, retaining, or influencing appraisers?

Accepted Answer

Loan production staff with an interest in the transaction

Answer

Compliance officers reviewing appraisal quality

Answer

AMC employees contracted by the lender

Answer

State-certified appraisal reviewers

Question 3

Which entities establish the primary appraisal guidelines for conventional mortgage loans intended for sale on the secondary market?

Accepted Answer

Fannie Mae and Freddie Mac

Answer

FHA and the VA

Answer

The Consumer Financial Protection Bureau (CFPB)

Answer

The Federal Reserve and OCC

Question 4

FIRREA of 1989 primarily required that appraisals for federally related transactions be performed by:

Accepted Answer

State-licensed or state-certified appraisers

Answer

Lender employees using AMCs

Answer

Appraisers approved directly by the federal government

Answer

Certified General appraisers only

Question 5

When reviewing an appraisal for a federally related transaction, which credential must the reviewer hold at minimum?

Accepted Answer

State licensure or certification as an appraiser

Answer

A valid real estate broker license

Answer

An MAI designation from the Appraisal Institute

Answer

A CAR credential from an approved organization

Question 6

A 'desk review' in the mortgage lending context is best described as:

Accepted Answer

An evaluation of the appraisal report without an on-site property inspection

Answer

A review performed at the subject property's reception desk

Answer

A review that includes a drive-by exterior inspection of the subject

Answer

A review limited to verifying the appraiser's license status

Question 7

Which of the following best describes the purpose of the Interagency Appraisal and Evaluation Guidelines?

Accepted Answer

To provide federal regulatory agencies' expectations for safe and sound appraisal practices in real estate lending

Answer

To set maximum fee limits for appraisal services

Answer

To replace USPAP for federally related transactions

Answer

To establish AMC registration requirements in all states