A mortgage team asks a state compliance officer about appraisal and valuation requirements during a record-retention audit. Which answer should guide the file?
Correct Answer
B) Remove value-based compensation or retaliation pressure
Why this is correct: Appraisal Independence Requirements strictly prohibit tying an appraiser's compensation or the threat of withholding future business to the value conclusion in an appraisal. "Remove value-based compensation or retaliation pressure" is the only action that aligns with this core principle of valuation independence. Why the other choices are wrong: "Discuss a target value with the appraiser to keep the transaction alive" is illegal coercion under AIR. "Order a second appraisal solely because the first value was too low" is prohibited unless there is a legitimate, substantive basis for questioning the appraisal's compliance or accuracy, not just dissatisfaction with value. "Withhold the valuation copy until closing if the applicant does not ask" violates the mandatory requirement to provide the copy to the borrower within a specified timeframe, regardless of whether they request it. Exam tip: For appraisal questions, the correct answer always protects the appraiser's independence and ensures the borrower receives the report.
Why This Is the Correct Answer
The correct response is "Remove value-based compensation or retaliation pressure" because Appraisal handling requires valuation independence and timely valuation copies.
Why the Other Options Are Wrong
Option A: Discuss a target value with the appraiser to keep the transaction alive.
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 C: 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 D: 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.
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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