Appraisal Conflicts Resolved?

Today something was done in the mortgage business many people thought already existed. The large mortgage underwriters are now not going to use Appraisers that have an affiliation with parties to the transaction. Fannie Mae and Freddie Mac are implementing this practice so loans and the underlying real estate truly reflect the value.

Many people may think "was it different before?" and the answer is Oh Yes! Appraisers have been chosen by the lenders for years. Why? Possibly for many reasons, control of the underlying real estate value whether up or down, fee sharing or rebates (appraisal fees are paid by the borrower), control of the loan process, etc. As one could imagine these reasons also open up the possibility of mis-management and possible fraud in the loan underwriting process.

Let's think "we need a value of $100k" to make this loan work, Mr. Appraiser proposes a value of $95k. Well the loan cant' be underwritten at that value, so the appraiser and the underwriter who have a common/affiliate relationship get together and the the appraiser goes back and makes an upward adjustment of $5k (equals 5%) to the value of the home. Why would the appraiser do that? Well if they have something called an Affiliate relationship why wouldn't they - if they cant' underwrite the loan at $95k then nobody makes money if they do they "all' make money and the "all" were somehow the same company (e.g. Affiliate).

Interesting nobody thought of this before? Or better yet nobody put this into place until now.