A lot of Realtors in my area are complaining that the homes are not appraising like they should. The main reason behind this is because lenders are forced to order appraisals through a management company that randomly picks appraisers instead of playing favorites to the appraisers that over-appraise properties high enough to make the loan work. I have seen this old practice first hand many times.
If somebody would check into the two congressman who are sponsoring this bill, I bet you will find some heavy connections to NAR and their monies.
I listen to a local real estate radio program on Saturday and they were in absolute whine mode on the last show over the new the way appraisals are done.
Reading between the lines of their comments they seem to resent the lack of control over the whole process and were complaining of loosing deals and the added wait times to close a deal.
They did relay some stories of failed or delayed closings due to minor mistakes on the closing statement and no way to have them fixed quickly because of the now arms length relationship they must maintain under the new law.
To me it sounds like the law of unintended consequences is working overtime.
Lots of whining here in KC also. Two examples. One, home was a real nice rehab, but priced 100k higher than anything else in the area. An out of town appraiser set it with all of the other homes that have been sold recently in the same area. Home appraised for 100k lower than asking price. Re-habber was stuck. Two; a new home was built in a lower-cost neighbor hood. Most homes in the area were very old, some torn down. This one was built on one of the lots that were torn down. Average price in that area was 70K. New home had asking price of 120k. Guess what. The out-of-town computer savy appraiser set it at 65k. Anytime an appraiser sees the word forclousure, price drops 30%. Lawmakers created and got the law. Now here are the consequences of their efforts. The same is to be said in all areas of life, and government. Times are a changing.