A loan officer sends the appraiser three comparable sales he selected himself, with a note reading "these support $455,000". He offers no reason why the appraiser’s own comparables were unsuitable. What is the correct handling?
Correct Answer
C) Do not pressure the appraiser to reach a target value
Why this is correct: The core concept is appraisal independence under Regulation Z (the governing federal rule This rule strictly prohibits any action that coerces, influences, or otherwise pressures an appraiser to reach a predetermined valuation. The loan officer's desire to "raise the value to make the deal work" is the exact scenario the rule is designed to prevent. The only compliant response is to avoid any such pressure. Why the other choices are wrong: Ordering a second appraisal solely because the first value was too low is prohibited coercion, as it seeks to shop for a higher value. Withholding the valuation copy until closing violates the borrower's right to receive a copy promptly. Removing unfavorable valuation comments before giving the report to the applicant is a form of misrepresentation and violates rules requiring the delivery of a complete, accurate report. Exam tip: Any action aimed at influencing the appraiser's independent judgment to achieve a specific loan outcome is a violation. The rule is absolute: no pressure for a target value.
Why This Is the Correct Answer
The correct response is "Do not pressure the appraiser to reach a target value" because Lines 215-219; 12 CFR 1026.42(c).
Why the Other Options Are Wrong
Option A: Order a second appraisal solely because the first value was too low.
This choice is a tempting shortcut, but it conflicts with appraisal and valuation independence because the file still needs the required documentation, timing, or rule-based review before the action is taken.
Option B: Withhold the valuation copy until closing if the applicant does not ask.
This choice is not the best answer because it applies the wrong file step for appraisal and valuation independence; the governing rule is tested by the correct option.
Option D: Remove unfavorable valuation comments before giving the report to the applicant.
This choice is not the best answer because it applies the wrong file step for appraisal and valuation independence; the governing rule is tested by the correct option.
Memory Technique
appraisal and valuation requirements: identify the rule being tested, then choose the action that documents or applies that rule before the file moves forward.
Exam Tip
For appraisal and valuation independence questions, separate the required file step from plausible sales, timing, or documentation shortcuts.
Common Mistakes to Avoid
- -Choosing an internal exception instead of the governing rule
- -Treating preliminary or informal facts as a substitute for required documentation
- -Answering from a familiar but unrelated mortgage topic
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