Loan Officer Appraisal and Property Valuation Flashcards
7 cards from real Loan Officer Exam practice questions. Tap to flip, then mark Knew It or Still Learning — missed cards come back until you master them.
Read the first 7 Loan Officer Appraisal and Property Valuation flashcards as text
How is 'market value' defined in real estate appraisal?
Answer: The most probable price a property should bring in a competitive and open market
Market value is defined as the most probable price a property should bring in a competitive and open market under conditions requisite to a fair sale between a willing buyer and seller.
Which federal law requires lenders to provide mortgage applicants with a free copy of any written appraisal developed for a first-lien dwelling loan?
Answer: ECOA
ECOA (Regulation B), as amended by Dodd-Frank, requires lenders to provide applicants with a free copy of any written appraisal or valuation for a first-lien mortgage loan.
What does an 'as-is' appraisal reflect?
Answer: The property's value in its current physical condition at the time of appraisal
An 'as-is' appraisal reflects the property's value in its existing condition at the time of inspection, without assuming any future repairs or improvements.
What does the abbreviation 'URAR' stand for in mortgage lending?
Answer: Uniform Residential Appraisal Report
URAR stands for Uniform Residential Appraisal Report (Fannie Mae Form 1004), the standard form used to document appraisals of single-family residential properties.
Which organization establishes the Uniform Standards of Professional Appraisal Practice (USPAP) that govern federally related transactions?
Answer: The Appraisal Foundation
The Appraisal Foundation, a congressionally authorized nonprofit, establishes USPAP, which sets the minimum ethical and performance standards for appraisers in federally related transactions.
A 'drive-by' appraisal is best described as which type of appraisal?
Answer: An exterior-only inspection appraisal where the appraiser does not enter the property
A drive-by appraisal (Form 2055) involves the appraiser observing the property's exterior from the street without entering, providing a limited scope of inspection.
Under FIRREA, which real estate transactions require an appraisal by a state-licensed or state-certified appraiser?
Answer: Federally related transactions that exceed established de minimis thresholds
FIRREA requires that federally related transactions exceeding de minimis thresholds established by federal regulators must use state-licensed or state-certified appraisers.