Back2Basics: Appraisals | Compliance Alliance

FIRREA appraisal regulations do not require an appraisal for a residential real estate transaction of less than:

a. $250,000

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b. $400,000

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c. $500,000

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d. $1,000,000

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Regulation B requires a bank to provide an applicant with a notice of right to receive appraisals when it receives an application for:

a. Any consumer-purpose credit

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b. Any credit to be secured by a lien on real estate

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c. Any credit to be secured by a lien on a dwelling

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d. Any credit to be secured by a first lien on a dwelling

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When the regulations do not require an appraisal for a transaction to be secured by real estate because the transaction amount is below the applicable threshold:

a. The bank must use an automated valuation model to obtain a value

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b. The bank is not required to determine the property’s value

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c. The bank must obtain an appropriate evaluation of the real property’s value

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d. The bank may use any other approximation of value, such as tax value or replacement cost value

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An appraisal would be required for:

a. A $350,000 residential real estate transaction

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b. A $600,000 purchase of farm land, with repayment to be made out of farm proceeds

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c. A $425,000 commercial real estate transaction, with repayment to be made from rental income on the property

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d. A $750,000 commercial construction loan, with repayment to be made out of manufacturing revenue generated at a different location

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When a second appraisal is required under the HPML rules, the bank may:

a. Charge only for one appraisal

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b. Charge for one appraisal and an admin fee for the copies

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c. Charge for both appraisals

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d. Not charge for any appraisals

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Banks only need to ensure appraiser independence on Regulation Z loans

a. True

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b. False

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State certified appraisers are required for:

a. Transactions of $1,000,000 or more

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b. Commercial real estate transactions of $500,000 or more

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c. Residential real estate transactions involving atypical properties or market conditions

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d. All of the above

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An appraisal used to meet the FIRREA requirements must determine the property’s:

a. Sale Price

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b. Taxable Value

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c. Market Value

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d. Replacement Cost Value

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Regardless of the increase in sale price on an HPML transactioi, a second appraisal will not be required if:

a. The transaction value is below $400,000

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b. The loan is overcollateralized

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c. The seller purchased the property from a foreclosure

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d. The consumer waives the second appraisal

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The requirement for a bank to provide the applicant with a notice of the right to receive appraisals does not apply to a loan application if the credit applied for is:

a. To be secured by a secondary lien

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b. To be secured by a secondary dwelling

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c. Commercial purpose

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d. Open-ended

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