Under OCC 12 CFR 34.44(f), who must perform an appraisal required for a federally related transaction?
Correct Answer
C) An appropriately state-licensed or state-certified appraiser
For an appraisal required under the OCC federally related transaction rules, the appraiser must hold the appropriate state license or certification. Required credential level depends on the applicable transaction provisions; the OCC does not substitute professional association membership for state credentials.
Why This Is the Correct Answer
Option C is correct because an appraisal required for a federally related transaction must be performed by an appropriately state-licensed or state-certified appraiser. The interagency guidance states that the selected appraiser holds the appropriate state certification or license at the time of the assignment. The credential level needed depends on the applicable transaction provisions.
Why the Other Options Are Wrong
Option A: A member of a recognized professional appraisal association
Option A is wrong because membership in a professional appraisal association does not substitute for the required state license or certification. Association designations may reflect training, but the rule looks to state credentials.
Option B: A holder of a federally issued appraiser license
Option B is wrong because the federal framework relies on state-issued appraiser credentials. A 'federally issued appraiser license' is not the credential the rule requires; the appraiser must hold the appropriate state license or certification.
Option D: A licensed real estate broker familiar with the market
Option D is wrong because a real estate broker license, even with strong market familiarity, is not an appraiser license or certification. A required appraisal must be performed by an appropriately state-licensed or state-certified appraiser.
Feds require, states credential
Federal rules say an appraisal is required, but the state issues the appraiser's license or certification.
How to use: Use this when an option suggests a federal license, association membership or broker license qualifies someone for a required appraisal.
Exam Tip
For federally related transactions, look for an answer that names a state license or certification. Association membership and broker licenses are distractors.
Common Mistakes to Avoid
- -Believing there is a federal appraiser license that satisfies the rule
- -Assuming professional association membership substitutes for a state credential
- -Thinking a real estate broker license qualifies someone to perform a required appraisal
Concept Deep Dive
Analysis
This question tests who may perform an appraisal required for a federally related transaction under the OCC rules. The federal framework relies on state credentialing, so the appraiser must hold the appropriate state license or certification. Professional association membership, a broker's license or a supposed federal license do not meet that requirement.
Background Knowledge
Federal financial institution regulators require that appraisals for federally related transactions be performed by state-licensed or state-certified appraisers. States issue and supervise these credentials. Whether a licensed or a certified appraiser is required depends on the transaction type and the applicable regulatory provisions.
Real-World Application
A national bank needs an appraisal for a commercial loan that is a federally related transaction. The bank engages an appraiser who holds the appropriate state certification at the time of the assignment. A local broker who knows the market well could not perform the required appraisal on a broker license alone.
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