Last week, the New York Times published an article “In Appraisal Shift, Lenders Gain Power and Critics” (you can read excerpts at Appraisal Scoop). Yesterday, the Times ran with what could be read as a logical extension of the previous article.
In “Appraisals As Deal Scuttlers“, the Times highlights a significant unintended consequence of HVCC – the use of appraisers who lack geographic competency. The article starts with a home that sold for $555,000 but the appraisal came in $490,000. “Peter Caruso, owner of Caruso & Boughton Realty in Franklin Square, said that it was lenders who were driving the trend toward lower appraisals, and that they were ‘almost trying to decrease the prices below what the market is bearing,’ by using appraisal management companies that don’t hire local appraisers. ‘How do you sell something in Nassau County when it goes to a management company in Pennsylvania and they assign it to someone in Montauk?‘”