Sec5-38*

1. Question

An MLO provides an appraiser with additional information about comparable properties that may affect the value conclusion. Under valuation independence rules, how is this action generally treated?

A) It is prohibited because the MLO may never communicate with the appraiser

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B) It is permitted to ask the appraiser to consider additional information about the property or comparable properties

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C) It automatically invalidates the appraisal

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D) It is permitted only if the borrower signs a waiver

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2. Question

A lender asks an appraiser to explain the basis used to support a property valuation. Under valuation independence requirements, how is this generally treated?

A) It violates valuation independence

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B) It is considered mortgage fraud

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C) It is permissible to request additional information about the basis for a valuation

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D) It is allowed only for FHA loans

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3. Question

An underwriter notices a factual mistake in an appraisal report regarding the square footage of a property. Under valuation independence standards, what may the lender do?

A) Ignore the error because appraisals cannot be questioned

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B) Request that the appraiser correct factual errors in the valuation

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C) Replace the appraiser immediately without explanation

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D) Change the appraisal internally without contacting the appraiser

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4. Question

A creditor orders multiple appraisals on a borrower’s principal dwelling. Under valuation independence requirements, when is this practice generally permitted?

A) When the creditor always selects the appraisal with the highest value

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B) When the creditor selects the appraisal that closes the loan fastest

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C) When the creditor follows a policy of selecting the most reliable appraisal rather than the highest value

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D) When the borrower agrees to pay for every appraisal ordered

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5. Question

An appraiser performs substandard work that violates the appraisal engagement agreement. Under valuation independence rules, what action may the creditor take?

A) Increase the appraiser’s compensation

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B) Ignore the contract violation

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C) Withhold compensation for breach of contract or substandard performance of services

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D) Require the borrower to pay the appraiser directly

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6. Question

A lender follows a state regulatory requirement concerning appraisal practices. Under valuation independence standards, how is this generally treated?

A) It violates appraisal independence

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B) It is permissible to take action required by applicable federal or state law, regulation, or agency guidance

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C) It is prohibited unless approved by the borrower

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D) It is allowed only for government-backed loans

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7. Question

A borrower applies for mortgages with several mortgage companies at the same time. What will generally appear on the borrower’s credit report?

A) Only the first mortgage inquiry

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B) A record of the additional mortgage inquiries

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C) The final loan approval decision only

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D) The borrower’s future payment history

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8. Question

Shortly before loan closing, a lender orders an updated credit report. What is a common reason for doing this?

A) To increase the appraised value of the property

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B) To verify the property tax assessment

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C) To identify any new inquiries or credit activity occurring after the original application

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D) To establish the sales price of the home

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9. Question

A lender orders an updated credit report immediately before closing and notices several new mortgage inquiries. What may this reveal?

A) That the borrower refinanced the property already

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B) That inquiries were made after the borrower originally applied with the mortgage company

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C) That the borrower paid off all existing debts

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D) That the appraisal value increased

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10. Question

An updated credit report shows new mortgage-related inquiries shortly before closing. According to prudent lending practices, what should the lender do?

A) Immediately deny the loan without explanation

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B) Ignore the additional inquiries

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C) Determine whether the borrower has applied for an additional mortgage

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D) Require the borrower to switch loan programs immediately

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