V. APPRAISER INDEPENDENCE SAFEGUARDS

Mortgagees and 3rd parties working on behalf of mortgagees are expressly prohibited from:
Appraiser in any manner

1. Withholding or threatening to withhold timely payment or partial payment for an appraisal report
2. Withholding or threatening to withhold future business or demoting, terminating or threatening to demote
   an appraiser
3. Express or implied promise of future business, promotions or increased compensation for an appraiser
4. Conditioning an appraisal order or payment of appraisal fee, salary or bonus to an appraiser on the opinion, conclusion or valuation to be reached, or on a preliminary value estimate requested from an appraiser
5. Requesting an appraiser to provide an estimated, predetermined or desired valuation prior to completion
   of the appraisal report, or requesting estimated values or comparable sales at any time prior to the completion of an appraisal report
6. Providing to the appraiser an anticipated, estimated, encouraged or desired value for a subject property
   or a proposed target amount to be loaned to the borrower, except that a copy of the sales contract for purchase must be provided
7. Providing to the appraiser, appraisal company, appraisal management company or any entity or person related to the appraiser, appraisal company or appraisal management company, stock or other financial
   or non-financial benefits
8. Allowing the removal of an appraiser from a list of qualified appraisers or the addition of an appraiser to
   an exclusionary list of qualified appraisers, used by any entity, without prompt written notice to such appraiser, which such notice shall include written evidence of the appraiser's illegal conduct, a violation
   of USPAP or state licensing standards, improper or unprofessional behavior or other substantive reason
   for removal
9. Ordering, obtaining, using, or paying for a 2nd or subsequent appraisal or AVM in connection with a
   mortgage financing transaction unless (i) there is a reasonable basis to believe the initial appraisal was flawed or tainted and such appraisal is clearly and appropriately noted in the loan file, or (ii) unless such
   is done pursuant to written, pre-established bona-fide pre- or post-funding appraisal review or quality
   control process or underwriting guidelines, and so long as the lender adheres to a policy of selecting the
   most reliable appraisal, rather than the appraisal that states the highest value
10. Any other act or practice that impairs or attempts to impair an appraiser's independence, objectivity
    or impartiality or violates law or regulation, including, but not limited to TILA, Reg Z and USPAP

VI. APPRAISER ENGAGEMENT

1. Mortgagees along with appraisers are responsible for the quality and accuracy of appraisals
2. The lender (or third-party acting for the lender) must select an appropriate appraiser for every assignment
3. The lender (or third-party acting for the lender) must not assume, simply because an appraiser is state certified, the appraiser is qualified or knowledgeable in a specific market area
4. The lender is responsible to determine whether an appraisers qualifications are sufficient to enable the appraiser to competently perform appraisals prior to appraisal assignment
5. USPAP and its Competency Rule apply to all FHA insured loan transactions

<< FHA COMPLIANCE - PAGE 1

| HVCC COMPLIANCE |