Many mortgage professionals feel banks are encouraging appraisers to come in with low values and hurting the housing recovery. Ironically, this isn’t the first time the appraisers have been scrutinized about their values. During the sub prime disaster appraisers were blamed for inflating values and working in conjunction with mortgage brokers to push home values that might otherwise be questionable. Despite making mortgage brokers and appraisers the “fall guys” to these loans that they signed off on, the banks have gone way in the other direction with what some might consider overly conserative guidelines. The Mortgage Bankers Association feel that appraisals still aren’t conservative enough to adequately protect their investment.
Regardless of the debate, The National Association of REALTORS® reported that 16 percent of real estate pros surveyed in June reported a cancelation in a sale, mostly due to a large number of low appraisals. I believe getting bank financing always kills a deal because it puts them in control the make the rules…and we see where that has gotten us!