A manager suggests telling appraisers the contract price up front on every order, so they "know what they are working towards". A compliance analyst objects. On what grounds?
Correct Answer
D) Do not pressure the appraiser to reach a target value
Why this is correct: The governing rule is appraisal independence (the governing federal rule It forbids any attempt to influence an appraiser's valuation. When a compliance review uncovers that a loan officer wants the appraiser to raise the value, the immediate and mandatory response is to cease and prevent any such pressure. The MLO must ensure the appraiser's work remains independent and unbiased. Why the other choices are wrong: Withholding the valuation copy until closing if the applicant does not ask violates disclosure timing rules; borrowers must receive a copy promptly. Removing unfavorable valuation comments before giving the report to the applicant is altering the report, which is fraudulent and non-compliant. Asking the appraiser to ignore a condition issue is another form of prohibited pressure that seeks to influence the appraisal's content for the loan's benefit. Exam tip: In any compliance scenario, the correct action is always to uphold independence. Never alter, delay, or influence the appraisal process to facilitate a loan.
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: 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 B: 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.
Option C: Ask the appraiser to ignore a condition issue so the loan can meet timing.
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.
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
Before the team acts on a servicing handoff check, a closing coordinator must address Asset Verification and Reserves. Which response is most defensible?
An MLO is reviewing procedures for a case where a cost changes after the Closing Disclosure has already been provided. What is the proper handling?
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?
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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A branch manager asks about a loan file because a processor wants to omit known monthly obligations from underwriting. What should happen?
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