Which of the following is NOT typically a function of state appraiser regulatory agencies?
Correct Answer
C) Setting customary and reasonable fees for appraisals
State appraiser regulatory agencies do not set customary and reasonable fees for appraisals. Fee determination is typically left to market forces and lender policies, while regulatory agencies focus on licensing, enforcement, and professional standards compliance.
Why This Is the Correct Answer
Option C is correct because state appraiser regulatory agencies do not set customary and reasonable fees for appraisals. Fee determination is governed by market forces, lender policies, and federal regulations like those under Dodd-Frank, not by state regulatory agencies. State agencies focus on professional standards and qualifications rather than pricing controls. Setting fees would constitute market interference beyond their regulatory mandate.
Why the Other Options Are Wrong
Option A: Issuing appraiser licenses and certifications
Option A is incorrect because issuing appraiser licenses and certifications is a primary function of state regulatory agencies, as mandated by federal law requiring state-level licensing programs.
Option B: Investigating complaints against appraisers
Option B is incorrect because investigating complaints against appraisers is a core enforcement function of state regulatory agencies to maintain professional standards and protect the public.
Option D: Monitoring continuing education compliance
Option D is incorrect because monitoring continuing education compliance is a standard regulatory function to ensure appraisers maintain current knowledge and skills throughout their careers.
LIE-M Framework
Remember what state agencies DO: License (issue licenses), Investigate (complaints), Educate (monitor continuing education), Monitor (compliance). They don't set Market prices - that's outside their LIE-M scope.
How to use: When you see a question about state regulatory agency functions, run through LIE-M. If the option doesn't fit License, Investigate, Educate, or Monitor, it's likely the exception you're looking for.
Exam Tip
Look for the option that involves market pricing or fee setting - regulatory agencies typically don't control market economics, only professional standards and qualifications.
Common Mistakes to Avoid
- -Confusing state regulatory functions with federal oversight responsibilities
- -Assuming regulatory agencies control all aspects of the appraisal process including pricing
- -Mixing up enforcement functions with market regulation functions
Concept Deep Dive
Analysis
This question tests understanding of the scope and limitations of state appraiser regulatory agencies' authority. State regulatory agencies are primarily focused on professional oversight, licensing, and enforcement of standards rather than market regulation. Their role is to ensure appraisers meet qualification standards and maintain professional competency, not to interfere with market-driven pricing mechanisms. The distinction between regulatory oversight and market intervention is crucial for understanding the boundaries of state agency authority.
Background Knowledge
State appraiser regulatory agencies were established following the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) of 1989 to oversee appraiser qualifications and conduct. These agencies operate under federal guidelines but are administered at the state level, focusing on licensing, education requirements, and professional conduct rather than market pricing mechanisms.
Real-World Application
In practice, when an appraiser receives a complaint about their fee being too high, the state regulatory agency would not investigate the fee amount itself, but rather whether the appraiser followed proper procedures and standards in completing the appraisal work that justified their fee.
More Report Writing Questions
Under FIRREA, which federal agency has the authority to set minimum standards for real estate appraisals in federally related transactions?
What is the minimum transaction threshold for requiring a state licensed or certified appraiser under Title XI for most federally related transactions?
The Dodd-Frank Act established which requirement specifically related to appraisal independence?
Which of the following is NOT a responsibility of the Appraisal Subcommittee (ASC)?
State appraiser regulatory agencies are primarily responsible for which of the following functions?
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