“The reason dolphins have a reputation for saving drowning swimmers is because you never hear from the ones they push out to sea.”
As a Realtor, you seldom hear about the transactions where the home appraised at (or above) the sales price, and the deal went on to close smoothly.
On the contrary, you hear about the train wrecks and disasters, where the appraisal came in low and scuttled the deal.
Which may help explain why there is a perception — unfounded, in my opinion — that big lenders’ appraisal standards are tougher than those of their smaller brethren.
Because big lenders underwrite more mortgages, statistically, you would expect them to generate proportionately more low appraisals as well.
Underwriting Standards
Which is not to say that all lenders’ underwriting standards are the same.
Appraisers I’ve worked with tell me that big lenders tend to have more quantitative (vs. qualitative) underwriting criteria.
The result?
On especially tough or close cases, the latter may have more discretion to “green light” a deal.
Also relevant: whether the lender is to going to re-sell the loan, or hold it in its own portfolio.
