Sec5-38*

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Question 1 of 10

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
- B) It is permitted to ask the appraiser to consider additional information about the property or comparable properties
- C) It automatically invalidates the appraisal
- D) It is permitted only if the borrower signs a waiver
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Question 2 of 10

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
- B) It is considered mortgage fraud
- C) It is permissible to request additional information about the basis for a valuation
- D) It is allowed only for FHA loans
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Question 3 of 10

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
- B) Request that the appraiser correct factual errors in the valuation
- C) Replace the appraiser immediately without explanation
- D) Change the appraisal internally without contacting the appraiser
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Question 4 of 10

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
- B) When the creditor selects the appraisal that closes the loan fastest
- C) When the creditor follows a policy of selecting the most reliable appraisal rather than the highest value
- D) When the borrower agrees to pay for every appraisal ordered
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Question 5 of 10

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
- B) Ignore the contract violation
- C) Withhold compensation for breach of contract or substandard performance of services
- D) Require the borrower to pay the appraiser directly
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Question 6 of 10

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
- B) It is permissible to take action required by applicable federal or state law, regulation, or agency guidance
- C) It is prohibited unless approved by the borrower
- D) It is allowed only for government-backed loans
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Question 7 of 10

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
- B) A record of the additional mortgage inquiries
- C) The final loan approval decision only
- D) The borrower’s future payment history
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Question 8 of 10

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
- B) To verify the property tax assessment
- C) To identify any new inquiries or credit activity occurring after the original application
- D) To establish the sales price of the home
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Question 9 of 10

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
- B) That inquiries were made after the borrower originally applied with the mortgage company
- C) That the borrower paid off all existing debts
- D) That the appraisal value increased
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Question 10 of 10

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
- B) Ignore the additional inquiries
- C) Determine whether the borrower has applied for an additional mortgage
- D) Require the borrower to switch loan programs immediately
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