Under the Appraiser Independence Requirements (AIR), which party is prohibited from selecting the appraiser for a federally related transaction?
Correct Answer
A) The mortgage broker or loan officer
Under AIR regulations in Section 129E of TILA, mortgage brokers and loan officers are specifically prohibited from selecting appraisers to maintain independence and prevent conflicts of interest that could lead to inflated property values.
Why This Is the Correct Answer
Under AIR regulations in Section 129E of TILA, mortgage brokers and loan officers are specifically prohibited from selecting appraisers to maintain independence and prevent conflicts of interest that could lead to inflated property values.
More Origination Questions
A borrower has a construction-to-permanent loan with a 12-month construction phase. At month 10, construction is only 60% complete due to delays. What is the most likely outcome?
For a construction-to-permanent loan, when must the initial Closing Disclosure be provided for the construction phase?
During a refinance transaction, the appraiser determines that significant unpermitted additions were made to the property. The appraiser wants to discuss this with the MLO before finalizing the report. What should the MLO do?
An appraiser discovers that a property has significant foundation issues that were not disclosed. The appraiser reduces the property value by $25,000 and includes detailed comments about the structural problems. The loan officer is upset because this will kill the deal. Under AIR, the loan officer:
An MLO's compensation structure includes higher payments for certain loan products. When is it acceptable to recommend these higher-compensated products?
People Also Study
Federal Mortgage-Related Laws
23% of exam
General Mortgage Knowledge
23% of exam
Ethics, Fraud & Consumer Protection
17% of exam
Uniform State Test Content
12% of exam
Previous Question
A borrower owns a rental property that generates $2,000 monthly rent. The property expenses are $800 per month. How should this rental income be calculated for qualifying purposes?
Next Question
What information must lenders provide to borrowers about PMI at loan closing according to the HPA?