Appraisal Standards Flashcards
In what circumstance is an appraisal or evaluation not necessary?
A. When an appraisal would be out of an abundance of caution only
B. Property is taken for other than its value
C. Government, GSE, or secondary market transaction
D. All of the above
D. All of the above
True/False: As a general rule, every real estate loan must have an appraisal.
True
Loans secured by 1-4 family residential real estate of what amount are required to have evaluations instead of appraisals?
A. $200,000 or less transaction value
B. $300,000 or less transaction value
C. $400,000 or less transaction value
D. $500,000 or less transaction value
C. $400,000 or less transaction value
Transaction value means the amount of the loan, not the value of the collateral real estate.
Commercial loans of what amount are required to have evaluations instead of appraisals?
A. $200,000 or less
B. $300,000 or less
C. $400,000 or less
D. $500,000 or less
D. $500,000 or less
Qualifying business loans of what amount are required to have evaluations instead of appraisals?
A. $500,000 or less transaction value
B. $750,000 or less transaction value
C. $1,000,000 or less transaction value
D. $1,500,000 or less transaction value
C. $1,000,000 or less transaction value
Real estate-related commercial loan where primary source of repayment is not sale or rental income from real estate
Transaction value means the amount of the loan, not the value of the collateral real estate.
In what circumstances is an evaluation required instead of an appraisal? Select all that apply.
A. Loans secured by 1-to-4 family residential real estate with transaction amount of $400,000 or less
B. Commercial loans of $500,000 or less
C. Qualifying Business Loans with transaction amount of $1,000,000 or less
D. Extending existing credit
All of the above
For extending existing credit: this is applicable regardless of whether new money is advanced; however, if advancing new money, there cannot be any adverse change in circumstances
True/False: Anyone involved in the appraisal of the property that’s taken as collateral, but also who selects the appraiser and who has any voice in that appraisal process, must be kept entirely independent from the lending decision. If that’s not possible due to the small size of a bank, prudent safeguards must be put in place to ensure independence is kept up as much as possible.
True
When can a pre-existing appraisal be used when a new borrower comes to the bank?
A. If it was engaged by the borrower
B. If it was engaged by a prior financial insitution
C. Never
B. If it was engaged by a prior financial institution
Readdressed appraisals: engaged by the borrower: not allowed
Transferred appraisals: engaged by a prior lender/bank: allowed
The compliance officer is responding to a report from examiners regarding the bank not procuring appraisals when it should. What is the BEST response to this criticism?
A. The bank will obtain an appraisal for loans secured by 1-4 family dwellings when the loan amount is above $400,000, and for loans not secured by 1-4 family dwellings, the bank will obtain an appraisal when the loan amount is above $500,000
B. The bank will obtain an appraisal for loans secured by 1-4 family dwellings when the loan amount is above $250,000, and for loans not secured by 1-4 family dwellings, the bank will obtain an appraisal when the loan amount is above $400,000
C. The bank will obtain an appraisal for loans secured by 1-4 family dwellings when the value of the real estate is above $400,000, and for loans not secured by 1-4 family dwellings, the bank will obtain an appraisal when the value of the real estate is above $500,000
D. The bank will obtain an appraisal for loans secured by 1-4 family dwellings when the value of the real estate is above $250,000, and for loans not secured by 1-4 family dwellings, the bank will obtain an appraisal when the value of the real estate is above $500,000
A. The bank will obtain an appraisal for loans secured by 1-4 family dwellings when the loan amount is above $400,000, and for loans not secured by 1-4 family dwellings, the bank will obtain an appraisal when the loan amount is above $500,000
The appraisals regulation requires an appraisal for loans secured by 1-4 family dwellings when the loan amount is above $400,000, and for loans not secured by 1-4 family dwellings, the bank will obtain an appraisal when the loan amount is above $500,000. All other choices misstate the amounts required by the rule.
An appraisal performed by a state-licensed or certified appraiser is required for which of the following real estate transactions?
A. Lease of real estate
B. Real estate subject to a long-term purchase agreement
C. Lien on real property taken solely because of an abundance of caution
D. Second lien home equity loan for $15,000 where the bank does not hold the first lien
B. Real estate subject to a long-term purchase agreement
If an application for credit is denied based on the Appraisal, or valuation, the borrower has how many days to request a copy—and how many days does the lender have to send a copy?
The borrower has 90 days to request a copy, and the lender has 30 days to provide the requested copy.
