West Virginia Mortgage Law Practice Test

What must a mortgage broker or lender document when an appraiser is used from more than 75 miles away?

1. The travel expenses involved

2. The appraiser’s approval status

3. The reasons for using the appraiser

4. Customer's consent

The correct answer is: The travel expenses involved

The requirement for a mortgage broker or lender to document the reasons for using an appraiser from more than 75 miles away emphasizes the importance of accountability and justification in the appraisal process. When an appraiser is located at such a distance, there may be concerns about the appraiser's familiarity with the local market conditions and property values. Therefore, documenting this rationale helps ensure compliance with regulations and demonstrates due diligence in selecting appropriate appraisal expertise. Maintaining detailed records regarding the choice of appraiser, especially regarding the distance traveled, supports transparency and can protect the lender or broker from potential challenges regarding the appraisal's legitimacy. Such documentation is crucial for regulatory reviews or audits that may occur in the mortgage lending process. While travel expenses, approval status, and customer consent are relevant considerations, the core requirement focuses on justifying the selection of an appraiser from a notable distance.