Overcoming challenges of borrower-ordered appraisals

A better way to shop for mortgages

Editor's note: This is the second in a two-part series. Read Part 1, "Let borrowers order their own appraisals." Last week's column detailed the following benefits from switching from a system of lender-ordered appraisals to a system of borrower-ordered appraisals: Borrowers would obtain appraisals before applying for a mortgage, and when the appraised value turned out to be too low, they would spare themselves and the lender the cost of an aborted application. The loan process would be shortened, allowing borrowers to use a shorter and cheaper lock period. Borrowers would no longer be dissuaded from shopping alternative lenders by the prospect that each application would require an additional appraisal fee. But there are other issues connected to such a switch, including the important objective of protecting appraisals from pressure exerted by any of the parties with a vested interest in the outcome. This was the major purpose of the Home Valuation Code of Cond...