During the housing boom, appraisers were constantly urged to be aggressive in their appraisals. Now that we are deep into the downturn, appraisers are being held to a brutal standard.

Even when they bring conservative appraisals to the lenders they are being turned away. It is truly amazing that the professionalism of the appraiser has been subjugated to the whims of the underwriters.

The conservative appraisers were ostracized during the housing boom because lenders wanted to lend the maximum. Now these same conservative appraisers are being told that they are too optimistic as lenders have crawled into a shell as they toughen lending standards.

Do you get the feeling that ethical appraisers can not win?

During the housing boom in the first half of the decade, lenders typically evaluated appraisals submitted as part of a loan application by running their own comparisons from their desks. Now, banks are much more likely to send appraisers out into the field to drive by a property and the nearby homes listed as comparables to help establish a home’s value. “You can have what I call a very realistic or conservative appraisal done by an independent fee appraiser and that will go to a lender’s underwriter, and the lender can come back saying we don’t think that value is accurate,” said Craine, who is also president of the San Francisco mortgage brokerage Smith-Craine Finance. “It used to only happen once in a blue moon. Now it’s happening maybe 1 in every 10 times.” via SF Gate

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