Short answer: when a home loan is secured by your principal dwelling, federal rules bar lenders, brokers, real estate agents and other settlement service providers from pressuring the person who values the home to hit a number. Appraisers may not materially misstate the value, people with an interest in the deal may not prepare the valuation, and a lender that knows of a violation may not lend based on that valuation unless it checks the value with reasonable diligence. This page covers federal law only; other rules may apply where you live. It is general information, not legal or financial advice.
Who the rules cover
The valuation independence rules apply to consumer credit secured by the consumer’s principal dwelling (12 CFR 1026.42(a)-(b), eCFR, text up to date as of October 28, 2026, read October 30, 2026). A “covered person” is the creditor or anyone who provides settlement services for the loan. The official comments list creditors, mortgage brokers, appraisers, appraisal management companies and real estate agents as examples. You, the borrower, are not a covered person, nor is a guarantor or a spouse who lives in the home but is not on the loan (Supplement I, comments 42(b)(1)-1 and -2, eCFR).
A valuation is an estimate of the home’s value in writing or electronic form, other than one produced only by an automated model (1026.42(b)(3)).
What counts as pressure
No covered person may try to make the value rest on anything other than the independent judgment of the person preparing it, through coercion, extortion, inducement, bribery, intimidation, compensation, instruction or collusion (1026.42(c)(1)). The rule lists these examples (1026.42(c)(1)(i)):
- Seeking to influence the person preparing the valuation to report a minimum or maximum value.
- Withholding, or threatening to withhold, timely payment because the home was not valued at or above an amount.
- Implying that keeping the work now or later depends on the value reported.
- Leaving the person out of future work because a value did not meet a set threshold.
- Making the person’s pay depend on the loan closing.
The official comments say the rule applies equally to pressure to push a value below an amount (comment 42(c)(1)(i)-2). Appraisers may not materially misrepresent the value, and no covered person may falsify a valuation or, unless they prepared it, materially alter it (1026.42(c)(2)).
What is still allowed
The rule lists actions that are not pressure (1026.42(c)(3)):
- Asking the person to consider more property information, including comparable sales.
- Asking for more detail or explanation of the value.
- Asking them to correct errors.
- Getting more than one valuation to pick the one that is more reliable.
- Withholding pay for breach of contract or substandard work.
- Acting as other law or agency guidance permits or requires.
If you think the valuation has errors or missed comparable sales, these are the kinds of points you can raise with your lender. See your right to a copy of the appraisal for how to get it.
Conflicts of interest
No one preparing a valuation or performing valuation management functions may have a direct or indirect interest, financial or otherwise, in the property or the transaction (1026.42(d)(1)(i)). Being the creditor’s employee or affiliate, or providing another settlement service, is not by itself a conflict, but the creditor must meet set conditions that depend on its size (1026.42(d)(1)(ii)-(4)). For a creditor with assets over $250 million on December 31 of both of the past two years, there are three conditions: pay not based on the value, reporting to someone outside loan production whose pay does not depend on closing, and no one in loan production choosing or influencing who prepares the valuation. For smaller creditors there are two: pay not based on the value, and anyone who orders, performs or reviews the valuation stays out of the decision on the loan.
This example is only for the math, with example asset figures, not for any lender.
| Item | Example |
|---|---|
| Assets on December 31, two years ago | $260 million |
| Assets on December 31, last year | $240 million |
| Over $250 million in both years? | No |
| Conditions that apply | 1026.42(d)(3): two conditions |
When a lender may not lend on the valuation
A creditor that knows, at or before closing, of a pressure or conflict violation may not extend credit based on that valuation unless it documents that it acted with reasonable diligence to determine the valuation does not materially misstate the value (1026.42(e)). The official comments say lending on a different valuation counts as reasonable diligence, and a second valuation is not always needed (comment 42(e)-1).
Fees for fee appraisers
The creditor and its agents must pay a fee appraiser a rate that is customary and reasonable for comparable work in the geographic market of the home (1026.42(f)(1)). A creditor is presumed to comply if the fee is reasonably related to recent rates in that market, adjusted for factors such as property type, scope of work, turnaround time and the appraiser’s qualifications, experience and work quality, with no antitrust violations, or if it relies on objective third-party fee information as the rule describes (1026.42(f)(2)-(3)). These rules govern what the appraiser is paid; for what you are charged for an appraisal, check your Loan Estimate.
Reporting appraiser misconduct
A covered person who reasonably believes an appraiser materially failed to follow the Uniform Standards of Professional Appraisal Practice or the ethical or professional rules for appraisers must refer the matter, within a reasonable time, to the appraiser certifying and licensing agency for the place where the home is located. A failure is material if it is likely to significantly affect the value (1026.42(g)).
What you can do
The CFPB says appraisers have to follow rules in reaching a value, lenders are not allowed to interfere with the appraiser’s judgment, and you should get a copy of the appraisal; if it is below the sale price, it suggests asking the seller to lower the price and talking with an attorney about your options under the purchase contract (CFPB, last reviewed September 11, 2024, read October 30, 2026; this page may be out of date). If you think someone pressured an appraiser, you can complain; see how to file a loan complaint or use consumerfinance.gov/complaint. For how loan originators may be paid, see mortgage broker compensation rules. For your own case, ask a lawyer; you can look for legal aid through the Legal Services Corporation.
Questions to ask the lender
- Who ordered the appraisal, and was it ordered through an appraisal management company?
- How do I send you comparable sales or corrections to consider?
- Will you get a second valuation if the first one has errors?
- When will I get my copy of the appraisal?
Checklist
- No one in the deal may pressure the person valuing your home toward a number.
- Asking for corrections or more comparable sales is allowed.
- The person valuing the home may not have an interest in it or the deal.
- A lender that knows of a violation needs reasonable diligence before lending on that valuation.
- Get your copy of the appraisal and check it.
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Sources
- eCFR: 12 CFR 1026.42, Valuation independence (Regulation Z), current text up to date as of October 28, 2026
- eCFR: Supplement I to Part 1026, Official Interpretations (Regulation Z), current text up to date as of October 28, 2026
- CFPB: My appraisal is less than the sale price. What does that mean for me? (last reviewed September 11, 2024)
- CFPB: Submit a complaint
- Legal Services Corporation: Find legal aid
Disclosure: Modern Lending Solutions is not a lender, loan broker or agent for any lender or loan broker, and does not make credit decisions. Any compensation we receive is paid by participating lenders, only for advertising services. This guide is general information, not financial or legal advice.