A compliance analyst is resolving FIRREA Appraisal Requirements during a loan-team coaching session. Which action best fits the rule?
Correct Answer
C) Do not pressure the appraiser to hit a target value
Why this is correct: FIRREA and the related appraisal independence rules (like the Interagency Appraisal and Evaluation Guidelines) require that appraisals be conducted free from inappropriate influence or coercion. A creditor or its agent cannot pressure an appraiser to reach a predetermined value. This ensures the valuation is objective and credible. The correct answer, "Do not pressure the appraiser to hit a target value," is a direct statement of this independence requirement. Why the other choices are wrong: "Order a second appraisal solely because the first value was too low" is wrong because ordering a second appraisal solely due to a low value, without a legitimate basis (e.g., flaws in the first report), can be seen as attempting to influence value, which is prohibited. "Withhold the valuation copy until closing if the applicant does not ask" is wrong because regulations generally require providing a copy of the appraisal report promptly upon completion or at least three days before closing, regardless of whether the applicant asks. "Remove unfavorable valuation comments before giving the report to the applicant" is wrong because altering an appraisal report is a serious violation of appraisal independence and integrity rules. Exam tip: Appraisal independence means no coercion regarding value. The applicant must receive a copy of the appraisal report promptly.
Why This Is the Correct Answer
The correct response is "Do not pressure the appraiser to hit a target value" because Appraisal handling requires valuation independence and timely valuation copies.
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
More Origination Questions
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During a post-application update, a quality-control reviewer encounters a Credit Analysis and Evaluation issue. Which response should avoid a shortcut that would misapply the rule?
Between the Loan Estimate and closing, prepaid interest increases $180, homeowner insurance increases $95, transfer taxes increase $40, and a credit report fee for which the consumer could not shop increases $12. There is no valid revised estimate or other exception. Which increases violate TRID's zero-tolerance rule?
A construction-to-permanent loan will disburse in 5 draws over 11 months before the permanent phase begins. Which Regulation Z appendix provides a disclosure method for multiple-advance construction transactions?
Before closing, the team discovers that a borrower asks which upfront charge can be collected before intent to proceed. What is the safest compliant answer?
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Before releasing the final construction draw, which combination most directly supports project completion and clear collateral?
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A construction-to-permanent note states that conversion requires completion, a certificate of occupancy, and no unresolved liens. Construction is finished, but a mechanic's lien remains. What should happen?
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