New York Attorney General Andrew Cuomo’s lawsuit against Washington Mutual has led to new appraisal rules for loans guaranteed by Fannie and Freddie. The new rules created a new middleman--the Appraisal Management Company--who assigns appraisers. What is your guess as to which appraiser is selected? Might it be that the jobs are handed out on the basis of the cheapest appraiser and the fastest turn-around time? Does that sound like a government quality improvement program?
"The increase in sales is less than expected because poor appraisals are stalling transactions. Pending home sales indicated much stronger activity, but some contracts are falling through from faulty valuations that keep buyers from getting a loan. Lenders are using appraisers who may not be familiar with a neighborhood, or who compare traditional homes with distressed and discounted sales." National Association of Realtors
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