A bank sends an appraiser the sales contract for a purchase and asks the appraiser to consider two additional comparables. Under the Interagency Guidelines, is this appropriate?
Correct Answer
C) Yes; the bank may share the contract and ask that more information be considered
An institution may exchange information with appraisers, including a copy of the sales contract, and may ask them to consider additional information about the subject or comparables, but must not coerce or communicate a predetermined value.
Why This Is the Correct Answer
Option C is correct because the Interagency Guidelines allow an institution to exchange information with an appraiser, including a copy of the sales contract for a purchase, and to request that the appraiser consider additional information about the subject or comparable properties. The bank's actions here stay on the permitted side of the line because they do not pressure the appraiser toward a value.
Why the Other Options Are Wrong
Option A: No; any contact between the bank and the appraiser breaches independence
Option A says any contact between the bank and the appraiser breaches independence. The guidelines expressly permit information exchange; only coercion or influence to misstate value is prohibited.
Option B: No; the sales contract must be withheld from the appraiser until delivery
Option B says the sales contract must be withheld from the appraiser until delivery. The guidelines specifically allow the institution to provide a copy of the sales contract for a purchase transaction.
Option D: Yes; and the bank may also tell the appraiser the value the loan needs
Option D adds that the bank may tell the appraiser the value the loan needs. Communicating a target value is a form of influence the guidelines prohibit, so this option is wrong even though sharing the contract is allowed.
Share facts, not targets
A lender may hand the appraiser facts and possible comparables, but not a number the loan needs.
How to use: Use this rule to sort lender communications into permitted and prohibited.
Exam Tip
Independence questions often hinge on whether a target value was communicated; requests to consider more data are generally permitted.
Common Mistakes to Avoid
- -Believing any lender contact with the appraiser violates independence
- -Thinking the sales contract must be withheld from the appraiser
- -Treating a request to consider comparables as a request to hit a value
Concept Deep Dive
Analysis
This question tests the line between permitted communication and improper influence under the Interagency Guidelines. Institutions may exchange information with appraisers, including providing the sales contract, and may ask the appraiser to consider additional comparables. What they must not do is coerce the appraiser or communicate a predetermined value.
Background Knowledge
Appraiser independence rules aim to prevent pressure that leads to misstated values. Institutions may still communicate with appraisers to give them relevant facts, ask for consideration of additional comparables, request explanations, or ask for correction of factual errors. The appraiser remains free to reach an independent conclusion.
Real-World Application
A loan officer emails the appraiser the purchase contract and two recent sales the buyer's agent mentioned. The appraiser reviews both sales, finds one comparable and one not, and reports the value supported by the analysis.
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