Property Valuation
A Wisconsin property appraiser who is hired by the lender must still provide an independent, unbiased opinion of value because:
AThe borrower is paying the appraisal fee
BAppraisal independence is required by federal law (Dodd-Frank) and USPAP✓ Correct
CThe seller is also a client of the appraiser
DState law mandates split appraisal fees
Explanation
Appraisal independence is mandated by Dodd-Frank, USPAP, and Fannie Mae/Freddie Mac guidelines to ensure that appraisals accurately reflect market value without lender or borrower influence.
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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.
LienA financial claim against a property that serves as security for a debt or obligation, giving the creditor the right to foreclose if unpaid.
Comparable Sales (Comps)Recently sold properties similar in size, condition, and location used by appraisers and agents to estimate a property's market value.
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.
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