Our senior lending officer's spouse has a small appraisal business (he doesn't even advertise). He is not state certified and therefore is limited in his appraisals; however, his service is used quite often for loan appraisals at our bank. Although we have not been questioned about this before by examiners, several of us are getting a little concerned about this relationship under RESPA rules. Could this be a problem we should try to head off?

Is it an area with a limited number of choices? I think you just need to remember to keep your seperation of duties. Don't allow that lending officer to underwrite the loan or to order and check the appraisal. You shouldn't eliminate that appraiser just because he is her husband, does he otherwise fit the same criteria as your others? Are they required to be certified? If so then you may have a problem.

We are not in an area with a limited number of choices. It just seems "convenient" to call him. My concern is RESPA at 12 USC 2602(8)...(D) "anyone who has an agreement, arrangement, or understanding with such person, the purpose or substantial effect of which is to enable the person in a position to refer settlement business to benefit financially from the referrals of such business."

Do you have a centralized appraisal ordering policy in place, or is there atleast someone outside of the loan production side placing the orders for the appraisals? If so, that would eliminate some of the question of his use (unless of course his wife has the power to influence the choice of his use).

What types of deals are you ordering for that require an appraisal, but don't require them to be done by a licensed/certified appraiser? I'd be more concerned about that issue.