Final answer:
Inflating property value is a violation of appraiser independence rules under Regulation Z, which mandates unbiased and accurate valuations free from undue influence or pressure.
Step-by-step explanation:
Inflating property value is a violation of appraiser independence rules under Regulation Z. The integrity of the appraisal process is crucial to the lending industry and ensuring consumer protection. Appraiser independence means that appraisers must be allowed to perform their duties without undue influence, coercion, or pressure from interested parties to the transaction, such as lenders, real estate agents, or borrowers.
Activities such as consulting with realtors, contacting the borrower, and disclosing loan terms are not inherently violations of appraiser independence. However, these actions can become violations if they are done with the intent to influence the appraiser. Independence is key for appraisers to provide an unbiased and accurate valuation of the property.