Under Fannie Mae AIR, which action violates the separation of appraisal selection from mortgage production?
Correct Answer
B) A loan officer influencing which appraiser is selected
Fannie Mae AIR bars restricted mortgage-production parties from selecting, recommending or influencing appraisal selection. Independent quality control and supported requests for explanation are different activities, provided other independence requirements are met.
Why This Is the Correct Answer
Option B is correct because appraiser independence requirements bar mortgage-production staff from selecting, recommending or influencing appraiser selection. The interagency guidelines likewise state that independence is compromised when loan production staff selects the appraiser for a specific transaction. A loan officer influencing the selection breaks that separation.
Why the Other Options Are Wrong
Option A: Independent credit-risk staff reviewing completed work
Option A describes independent credit-risk staff reviewing completed work. Independent quality control review is a separate, permitted activity, not a breach of the selection separation.
Option C: An authorized independent AMC selecting under compliant procedures
Option C describes an authorized independent AMC selecting the appraiser under compliant procedures. An independent party outside loan production selecting the appraiser is consistent with the separation requirement.
Option D: An independent reviewer requesting a supported explanation
Option D describes an independent reviewer asking for a supported explanation. Requesting clarification or support is a legitimate review activity, not influence over appraiser selection.
Sales staff stay out
People paid to produce loans do not pick the appraiser.
How to use: Use this to spot which party's involvement compromises appraiser selection.
Exam Tip
Identify who is acting: involvement by loan production staff in choosing the appraiser is the independence problem.
Common Mistakes to Avoid
- -Treating independent quality review as an independence violation
- -Thinking any lender communication with the appraiser is prohibited
- -Believing loan officers may recommend appraisers if they do not make the final pick
Concept Deep Dive
Analysis
This question tests appraiser independence and the separation of appraiser selection from loan production. Parties in mortgage production should not select, recommend or influence which appraiser is chosen. Independent quality control and supported requests for explanation are permitted activities.
Background Knowledge
Appraiser independence rules keep those who benefit from a loan closing away from appraiser selection and from pressuring value conclusions. Independent review, quality control and reasonable requests for more information are permitted when other independence requirements are met.
Real-World Application
A loan officer emails the lender's appraisal desk asking that a particular appraiser be assigned because she is known for meeting contract prices. The appraisal desk declines and assigns through its independent rotation instead.
More USPAP Questions
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