When it comes to money, I guess some people just toss shame and embarrassment out the window.

When asked about whether they consider themselves to be responsible for any part of the economic meltdown, mortgage brokers will insist that it was the lax regulatory environment that was the culprit, not the individual mortgage brokers who used that environment to squeeze every last penny they could out of the inflated housing market.

Now, of course, they're singing a different tune altogether, it sounds like.

We would just tell them the value we needed the appraisal to hit. Of course, the main check against rampant abuse was the mortgage underwriter. They are the ones that have the responsibility to review the appraisals and make sure that the comps are really comparable. Of course the broker and the appraiser are going to be scratching each others backs - simple economic self interest makes that unavoidable. The underwriter is the person who has the responsibility to review the attributes of the loan to make sure it is not too risky.

I'm a (gasp) mortgage broker who actually works with the new rules. Here's the real score.

1. It has added about $100 to the cost of an an appraisal, most of which goes to appraisal management firms. Appraiser's themselves are making about 15% less compared to the previous situation.

2. Lack of accountability is a two edged sword. While we cannot easily influence value, there is also no reason for any particular appraiser to offer decent customer service or to do a thorough professional job. They are assigned by the appraisal management firm, and suffer no consequences if they take too long or perform inadequately. Where this can come into play is when we attempt to lock a client's rate on application. If an appraiser takes longer than we expect to complete the job our lock can expire, which can cause significant economic damage to our clients. This was a major issue last month when we saw rates increase over a half percent in just a matter of weeks.

3. As a practical matter, appraisals are no longer portable. If we order an appraisal through lender "A", we are stuck with using lender "A" even if lender "B" offers a better value when we are ready to lock the rate. The legislation does contain a theoretical process by which lender "A" can transfer the appraisal to lender "B", but nothing requires lender "B" to accept the appraisal, and to my knowledge very few if any lenders will accept an appraisal ordered through another firm.

By the way, blaming mortgage brokers for the financing fiasco makes about as much sense as blaming the waiters for the food in a restaurant. Mortgage brokers by definition have never approved or funded a single loan. If the banks offer and market to loan brokers these stupid programs, and send their own employees out in the field to sell the exact same (or worse) programs in competition to mortgage brokers, just what the heck did they expect?

You can as well argue that a town is full of thieves if a bank put a large cardboard box of cash outside their doors Friday night, then discovered it empty Monday morning. Sure, the people who took the money should not have done so, but the people who put it outside have no right to act surprised about what happened.

..."compare traditional homes with distressed and discounted sales".

Houses are not completely fungible, of course, but same-size houses in the same neighborhood with the same features in the same condition don't suddenly become a lot more valuable because the owner is not as desperate to sell as someone else is. It is a sign of a functioning economy that similar assets have similar prices, regardless of the circumstances of their owners.

Maybe distressed homes take a small discount because of any additional complications of closing and the additional risk that a forced-out owner will be less inclined to leave the house in good condition, but to say that they're completely incomparable is absurd. When it comes down to it, if someone else is selling for cheaper for whatever reason, you need to lower your price to compete.

Just ask WaMu. They know all about lousy appraisals as that was what a good chunk of its SFR mortgage lending was based on 2006-2008.

As someone who has just sold and bought a house, I can say that the new appraisal regs have caused problems. It's especially bad in neighborhoods that were up-and-coming and that are in close proximity to nice neighborhoods. For instance, neighborhoods right around the corner from higher-end homes that are very similar in age, style, etc. that were experiencing appreciation are now being "punished" as appraisers are forced to use comps in the up-and-coming neighborhoods that might not actually be comps (think junkers). As opposed to using comps from the nicer neighborhood right down the road.

Also, folks who updated their homes are now no longer able to get the value they once thought they would get.

So there are some legitimate concerns and sellers are being punished in some instances.

The market I was in is the Houston area, which thankfully hasn't been hurt as much as the rest of the nation in the real estate deparment. Mostly because our real estate boom wasn't as out of control as other parts of the country, and our economy is doing better than most in the downturn.

So, Mr. Yun claims that ""Lenders are using appraisers... who compare traditional homes with distressed and discounted sales".

If the house across the street is in foreclosure and is sold off for pennies on the dollar but the lender, then that will effect the price of your house. It's called SUPPLY & DEMAND.

No amount for flowery appraisals is going to alter the fact that there are more properties for sale than there are buyers and a recovery in the property market is actually dependent upon DEMAND, not over-priced supply or the host of other tricks used by brokers, appraisers, lenders to inflate the market.