Property Valuation
A Louisiana appraiser must be 'independent' in their work because bias or partiality would:
ASimply result in a higher appraisal fee
BUndermine the credibility and reliability of the appraisal, potentially causing financial harm to lenders, buyers, or sellers who rely on the value conclusion✓ Correct
COnly affect FHA appraisals
DBe corrected automatically by the lender's review
Explanation
Appraiser independence is fundamental to USPAP and FIRREA. An appraiser who is biased or partial produces unreliable value conclusions, potentially causing financial harm to buyers, sellers, and lenders who rely on the appraisal for major financial decisions.
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Key Terms to Know
Appraisal
A professional estimate of a property's market value prepared by a licensed or certified appraiser.
Adjustable-Rate Mortgage (ARM)A mortgage with an interest rate that changes periodically based on a financial index, usually after an initial fixed-rate period.
Debt-to-Income Ratio (DTI)A lender's measure of a borrower's monthly debt obligations relative to their gross monthly income, used to evaluate loan eligibility.
Private Mortgage Insurance (PMI)Insurance required by lenders on conventional loans with less than 20% down payment, protecting the lender — not the borrower — against default.
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