Federal Mortgage LawsQuestion 93 of 400
Under appraisal independence rules, a person who prepares a valuation must generally be compensated at:
a.The lowest fee the lender can negotiate
b.A fee set entirely by the loan originator
c.No fee at all
d.A rate that is customary and reasonable for the geographic market
Explanation
The Dodd-Frank appraisal independence provisions require that fee appraisers be paid a rate that is customary and reasonable for appraisal services performed in the geographic market where the property is located. This protects appraiser independence by preventing pressure through artificially low fees. Loan originators cannot unilaterally suppress the fee.
Law Reference: Appraisal Independence Requirements (TILA / Reg Z 1026.42)Practice all 400 questions free — no signup required.
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