Real Estate Appraisal Flashcards
Greg Smith, a real estate lending officer from XYZ Bank, is planning to make a 500,000 loan to Milton Womack a good customer to purchase a piece of commercial real estate from a local real estate broker. The loan will have a loan to value ratio of 75%. Mr Womack has offered Greg an appraisal given to him by the seller of the property. The appraisal is very complete and is approximately three months old. Greg would like to waive the normal appraisal requirement and simply have the original appraiser update the sellers appraisal because this would save Mr. Womack the money a new appraisal would cost. Why or why not?
A. Yes, Greg may use the appraisal provided it goes through the bank’s established appraisal review process.
B. No, Greg may not use the appraisal because the appraiser was not engaged by another financial institution.
C. No, Greg may not use the appraisal because it so too old.
D. Yes, Greg may use the appraisal because it was done so completely, provided he knows the appraiser and has confidence in his work
B. No, Greg may not use the appraisal because the appraiser was not engaged by another financial institution.
In which of the following cases would ABC Bank have to obtain an appraisal performed by a state certified appraiser?
A. On a 200,000 loan made by MR and Mrs. Littlefield to purchase their home, which will be secured by their home
B. On a 75,000 loan to be secured by a two story commercial office building
C. On a 150,000 working capital loan fully secured by a bank certificate of deposit, on which the loan officer has also taken a lien on a vacant lot owned by the borrower
D. On a 450,000 loan to Mr. Burch secured by his life estate in his home. The home was left to Mr. Burch on the death of his father. The fathers will states that the home will belong to Mr Burch during his life but will revert to Mr Burch’s son on his death
D. On a 450,000 loan to Mr. Burch secured by his life estate in his home. The home was left to Mr. Burch on the death of his father. The fathers will states that the home will belong to Mr Burch during his life but will revert to Mr Burch’s son on his death
First National Bank would like to establish a policy regarding the evaluation of real estate related transactions secured by a 1-4 family residential property that are not subject to the appraisal requirement. Which of the following is acceptable in this policy?
A. All loans under 400,000 secured by a 1-4 family residential property must have an evaluation on file
B. All loans that do not require an appraisal by a state certified appraiser must have an evaluation
C. The evaluations generally will be performed by the loan officer responsible for the transaction
D. Evaluations may be performed by any loan officer in either commercial or consumer lending as well as any credit analyst
A. All loans under 400,000 secured by a 1-4 family residential property must have an evaluation on file
If a bank uses a staff appraiser to appraise property that secures loans at the bank, in which case would the appraiser most likely NOT be considered to be independent?
A. The appraiser is an employee of the bank’s affiliated holding company
B. The appraiser is an employee of the bank’s affiliated financial institution
C. The appraiser is an employee of the commercial loan department
D. The appraiser is employed by the bank but reports to the audit department
C. The appraiser is an employee of the commercial loan department
Value Inc is a federally-regulated AMC and a subsidiary owned and controlled by ABC bank, a federally insured depository institution. Value Inc is subject to all of the following requirements EXCEPT
A. The company must register with the state appraiser and certifying licensing agency in all states which it operates
B. The company must maintain compliance with valuation independence standards set forth in TILA
C. The company must require that all appraisals comply with USPAP
D. The company must verify that only state certified or state licensed appraisers are used for federally related transactions
A. The company must register with the state appraiser and certifying licensing agency in all states which it operates
