Loan Officer Exam Loan Officer Appraisal and Property Valuation 3

Question 1

What is an Automated Valuation Model (AVM)?

Accepted Answer

A computer-based tool that estimates property value using statistical models and public data

Answer

A manual appraisal method that still requires a licensed appraiser to inspect the property

Answer

A government-approved replacement for the standard URAR appraisal form

Answer

A lender's internal system used to schedule and track appraisal orders

Question 2

Under the Higher-Priced Mortgage Loan (HPML) appraisal rule, which loan triggers additional appraisal requirements?

Accepted Answer

A first-lien loan with an APR exceeding the Average Prime Offer Rate (APOR) by 1.5 percentage points or more

Answer

Any first-lien loan with an LTV ratio above 80%

Answer

Any loan insured by the Federal Housing Administration (FHA)

Answer

A conventional loan with a principal balance exceeding the conforming loan limit

Question 3

What is a 'Reconsideration of Value' (ROV)?

Accepted Answer

A formal request for the appraiser to review their opinion based on additional data or factual corrections

Answer

A completely new appraisal commissioned and paid for by the borrower

Answer

An appeal filed directly with the state appraisal licensing board

Answer

A lender's written override of the original appraiser's value conclusion

Question 4

Under the Dodd-Frank Act's appraiser independence requirements, which of the following actions is PROHIBITED?

Accepted Answer

Pressuring or coercing an appraiser to reach a predetermined value

Answer

Ordering an appraisal through an Appraisal Management Company (AMC)

Answer

Providing the appraiser with a copy of the executed purchase contract

Answer

Using the sales comparison approach as the primary valuation method

Question 5

What is the primary role of an Appraisal Management Company (AMC)?

Accepted Answer

An intermediary that manages the appraisal ordering process between lenders and independent appraisers

Answer

A government regulatory body that licenses and disciplines state-certified appraisers

Answer

A Fannie Mae subsidiary that reviews and approves residential appraisal reports

Answer

A company that trains aspiring appraisers and administers licensing exams

Question 6

When a property appraises below the agreed purchase price, which party typically has the most leverage to renegotiate the transaction?

Accepted Answer

The buyer, who can renegotiate, pay the gap in cash, or exercise an appraisal contingency

Answer

The lender, who can order a second appraisal to resolve the discrepancy

Answer

The appraiser, who may revise the value after reviewing the contract price

Answer

The title company, which can adjust the settlement statement accordingly

Question 7

What is the primary purpose of the Uniform Standards of Professional Appraisal Practice (USPAP)?

Accepted Answer

To set ethical obligations and minimum performance standards for appraisers

Answer

To establish maximum fee schedules appraisers are permitted to charge

Answer

To determine which specific properties are required to have a formal appraisal

Answer

To certify appraisers at the federal level and issue national appraisal licenses