Under Fannie Mae AIR, which described party is a restricted party barred from substantive valuation communications, subject to permitted explanation and factual-correction requests?
Correct Answer
C) A member of the lender’s mortgage production staff
Under Fannie Mae AIR, mortgage production staff are restricted parties barred from substantive valuation communications. The rule still permits requests for explanation or factual correction. An underwriter is not automatically unrestricted merely because of a job title; the person’s duties, compensation and supervision matter.
Why This Is the Correct Answer
Option C is correct because under Fannie Mae AIR, mortgage production staff are restricted parties barred from substantive valuation communications, while requests for explanation or factual correction remain permitted. Interagency guidance likewise says the collateral valuation program should be isolated from influence by loan production staff. Their role in generating loans creates the risk of pressure on value.
Why the Other Options Are Wrong
Option A: An independent AMC representative acting in appraisal management
Option A names an independent AMC representative acting in appraisal management. An independent AMC handling appraisal management is not loan production staff, so it is not the restricted party described.
Option B: An independent credit-risk reviewer outside mortgage production
Option B names an independent credit-risk reviewer outside mortgage production. A reviewer independent of production does not have the loan production role that makes a party restricted under AIR.
Option D: An appraiser acting independently of mortgage production
Option D names an appraiser acting independently of mortgage production. Independent appraisers are the people the independence rules protect, not the restricted parties.
Production staff stay out
People whose role is producing loans may not steer the value; they may only ask for explanations or factual corrections. Use this when deciding which party is restricted under appraiser independence rules.
How to use: Use this when deciding which party is restricted under appraiser independence rules.
Exam Tip
Identify the party tied to loan production. Parties described as independent of production are usually not restricted.
Common Mistakes to Avoid
- -Assuming job title alone decides whether someone is restricted
- -Thinking restricted parties cannot even request factual corrections
- -Treating independent appraisers or AMCs as restricted production staff
Concept Deep Dive
Analysis
This question tests appraiser independence rules and which parties are restricted from influencing valuations. The concern is that people with a stake in closing loans should not influence the appraisal. Mortgage production staff are the classic restricted party, though they may still ask for explanations or factual corrections.
Background Knowledge
Appraiser independence rules separate valuation from the loan production function so that appraisers are not pressured to reach a particular value. Whether a person is restricted depends on duties, compensation and supervision rather than job title alone.
Real-World Application
A loan officer whose pay depends on closings emails an appraiser asking her to reach the contract price. Under appraiser independence rules, that communication is improper, though the loan officer could properly ask her to correct a factual error such as the wrong bedroom count.
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