A loan originator tells a borrower that their property will "definitely appraise for the contract price" because the LO has worked with the appraiser before and knows they are "flexible." This statement constitutes:
Correct Answer
B) Prohibited misrepresentation regarding appraisal outcomes
Under the SAFE Act and state regulations, making definitive statements about appraisal outcomes constitutes misrepresentation. Loan originators cannot guarantee appraisal values or suggest that appraisers will be "flexible" to meet contract prices, as this implies potential appraisal influence.
Why This Is the Correct Answer
Under the SAFE Act and state regulations, making definitive statements about appraisal outcomes constitutes misrepresentation. Loan originators cannot guarantee appraisal values or suggest that appraisers will be "flexible" to meet contract prices, as this implies potential appraisal influence.
More UST Questions
If a state regulatory authority finds violations during an examination, what factors typically influence the severity of enforcement action?
Under the SAFE Act, an individual who works for a federally chartered bank and takes mortgage applications must:
An MLO under investigation claims that certain requested documents are protected by attorney-client privilege because they were prepared in consultation with legal counsel. How should the state regulator respond?
Which scenario represents the MOST serious violation of appraisal independence requirements?
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