Ethical Standards & Professional Conduct Flashcards
7 cards from real FHA practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Ethical Standards & Professional Conduct flashcards as text
Under the Dodd-Frank Act's Appraiser Independence Requirements, who is prohibited from selecting, retaining, or influencing the selection of appraisers for FHA loans?
Answer: Loan production staff, including loan officers and mortgage brokers
Dodd-Frank prohibits loan production staff, including loan officers and mortgage brokers, from selecting or influencing appraiser selection on covered mortgage transactions.
An FHA appraiser learns that comparable sale data they used was later found to be fraudulently inflated. What is the appraiser's best course of action?
Answer: Notify the lender and issue a corrected report if the information would have affected the value conclusion
If an appraiser learns that information used in a report was false, they should notify the client and correct the report if the error affected the assignment results.
Which of the following is a prohibited practice under both USPAP and FHA's Appraiser Independence Requirements?
Answer: Conditioning an appraisal fee on the loan closing
Contingent fees tied to loan closing outcomes are prohibited under both USPAP and federal Appraiser Independence Requirements.
What is the significance of the 'effective date' in an FHA appraisal?
Answer: The date to which the appraiser's value opinion applies
The effective date is the specific date to which the value opinion applies, which may differ from the date the report is signed or delivered.
Under USPAP's Ethics Rule, which conduct would constitute 'misrepresentation' in an FHA appraisal?
Answer: Describing the neighborhood as stable when market data shows it is declining
Characterizing a declining market as stable when data shows otherwise is a false and misleading statement, constituting misrepresentation under the Ethics Rule.
An FHA appraiser who is also a licensed real estate agent is approached to both list and appraise the same property. Under USPAP ethics, this situation requires:
Answer: Disclosure of the dual role in the appraisal report, and declining if independence is affected
Performing both listing and appraisal services creates a conflict requiring full disclosure, and the appraiser must decline the appraisal if independence cannot be maintained.
When an FHA appraisal report is transmitted electronically, which requirement still applies to the certification?
Answer: The appraiser's electronic signature must meet the standards of the Electronic Signatures in Global and National Commerce (E-SIGN) Act
Electronic signatures on FHA appraisal reports are acceptable when they comply with E-SIGN Act standards and the report meets all other USPAP and HUD requirements.