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

The Dodd-Frank Act codified Appraisal Independence Requirements, prohibiting loan production staff from improperly influencing appraisers.

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

AIR prohibits loan production staff—those with a financial interest in the outcome—from selecting, retaining, recommending, or influencing appraisers.

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

Fannie Mae and Freddie Mac (the GSEs) publish detailed appraisal guidelines that govern conventional loans sold on the secondary mortgage market.

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

FIRREA mandated that appraisals for federally related transactions must be performed by appraisers who are state-licensed or state-certified.

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

FIRREA and interagency guidelines require that reviewers of appraisals for federally related transactions be state-licensed or state-certified appraisers.

(CAR) Certified Appraisal Reviewer Practice Test

(CAR) Certified Appraisal Reviewer Practice Test

CAR Financing & Lending Standards in Appraisal Review