Portfolio Management & Strategy Flashcards

Under FHA guidelines, what is the maximum validity period for a new appraisal before it expires for mortgage insurance purposes?

Answer: 180 days

FHA appraisals are valid for 180 days from the effective date unless extended under specific FHA circumstances.

When building a diversified FHA appraisal practice, which property type strategy reduces revenue volatility?

Answer: Balancing single-family, condominium, and 2-4 unit residential assignments

Balancing across property types reduces dependence on any single market segment, which can experience volume swings due to rate changes or market cycles.

An FHA appraiser's roster indicates that 60% of work comes from a single AMC (Appraisal Management Company). What risk does this client concentration create?

Answer: Significant revenue loss if the AMC reduces volume, changes panels, or exits the market

Heavy dependence on one client creates vulnerability to that client's business decisions, panel changes, or insolvency, threatening a large portion of the appraiser's income.

When an FHA appraisal assignment involves a property in a federally declared disaster area, what portfolio management action is required?

Answer: Inspect the property and note disaster-related damage per FHA disaster area protocols

FHA requires appraisers to inspect and document damage in disaster-declared areas and follow specific post-disaster appraisal protocols before value can be reported.

An appraiser reviews their portfolio and finds that several appraisals were based on comparables more than 12 months old due to limited sales in rural markets. What FHA-compliant approach addresses this issue?

Answer: Expand the search area and provide a detailed explanation justifying older comparables

FHA allows older comparables in low-activity markets provided the appraiser documents the search process and explains why the comparables are the best available evidence.

In portfolio strategy, why should an FHA appraiser maintain a 'workfile' for every completed assignment even after payment is received?

Answer: To comply with record retention requirements and support the appraisal in case of review or litigation

USPAP and FHA require workfiles to be retained to support the appraisal opinion and defend the report in regulatory review, audit, or legal proceedings.

Which metric is most useful for an FHA appraiser to track at the portfolio level to identify potential compliance issues before they become violations?

Answer: Average days from inspection to report delivery versus contractual deadline

Tracking turnaround time against contractual deadlines reveals workload management problems that can lead to rushed reports, errors, and compliance failures.