Which section of the Dodd-Frank Act added the appraisal independence requirements now codified at 15 U.S.C. 1639e?
Correct Answer
D) Section 1472
Section 1472(a) of the Dodd-Frank Act added the appraisal independence requirements in 15 U.S.C. 1639e. These include prohibitions on coercion and improper influence and provisions for customary and reasonable compensation. Sections 1471, 1473, and 1474 are not the provision that added this section. This question asks specifically about appraisal independence, not the separate quality-control provisions for automated valuation models.
Why This Is the Correct Answer
Option D is correct because Section 1472(a) of the Dodd-Frank Act added the appraisal independence requirements codified at 15 U.S.C. 1639e. That section includes prohibitions on coercing or improperly influencing appraisers and requires customary and reasonable compensation for fee appraisers. The source note to 15 U.S.C. 1639e identifies Section 1472(a) as its origin.
Why the Other Options Are Wrong
Option A: Section 1474
Option A, Section 1474, amended the Equal Credit Opportunity Act to require creditors to give applicants copies of appraisals and valuations. It did not add the appraisal independence requirements in 15 U.S.C. 1639e, which came from Section 1472(a).
Option B: Section 1473
Option B, Section 1473, amended FIRREA's appraisal provisions, covering topics such as appraisal management companies and quality control standards for automated valuation models. It did not add 15 U.S.C. 1639e. Candidates who confuse appraisal independence with these FIRREA changes may pick this nearby number.
Option C: Section 1471
Option C, Section 1471, added the appraisal requirements for higher-risk mortgages, such as the interior-inspection requirement, codified at 15 U.S.C. 1639h. The source note to 15 U.S.C. 1639e credits Section 1472(a), not Section 1471, for the appraisal independence requirements.
Seventy-two keeps appraisers true
Link the rhyme "1472 keeps appraisers true" to the idea of independence from pressure. Section 1472 is the one that protects appraiser independence.
How to use: Use this when an exam lists several adjacent Dodd-Frank section numbers and asks which created appraisal independence rules.
Exam Tip
Connect the topic to the statute: appraisal independence, coercion and customary and reasonable fees point to Section 1472 and 15 U.S.C. 1639e. Do not let a separate provision on automated valuation models pull you to a nearby section number.
Common Mistakes to Avoid
- -Choosing an adjacent section number such as 1471 or 1473
- -Confusing appraisal independence rules with automated valuation model quality control provisions
- -Assuming the customary and reasonable fee rule comes from a separate statute
Concept Deep Dive
Analysis
This question tests recall of the specific Dodd-Frank Act provision that created the federal appraisal independence requirements. Section 1472(a) added 15 U.S.C. 1639e, which covers coercion, improper influence and customary and reasonable compensation. Because the answer choices are adjacent section numbers, candidates must tie the appraisal independence topic directly to Section 1472.
Background Knowledge
The Dodd-Frank Wall Street Reform and Consumer Protection Act included a subtitle addressing mortgage appraisal activities. Its appraisal independence provisions, now at 15 U.S.C. 1639e, prohibit coercion and improper influence on appraisers and require customary and reasonable compensation. These requirements apply to appraisals in connection with consumer credit secured by the principal dwelling.
Real-World Application
A loan officer emails an appraiser suggesting the value must reach the contract price for the deal to close. The appraiser recognizes this as possible improper influence under the appraisal independence requirements of 15 U.S.C. 1639e, added by Dodd-Frank Section 1472. The appraiser declines to change the analysis and documents the communication.
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