One of the things being debated in our profession right now is the appropriateness of expressing market value for a mortgage appraisal as a single number. The argument goes that if among typical buyers there would be a reasonable range of possible sale prices for a given property, wouldn’t it be more honest for appraisers to express it that way in their appraisal reports? Better that than to try and say the one number is the only right number, which obviously is not what happens out in the real world.

Then the lenders could directly exercise their own discretion instead of leaving the discretion to the appraiser and trying to influence it indirectly. If the sale price is within the range they can decide to do the loan, and if it isn’t they can increase or decrease that loan as suits their purposes. A borrower with great credit might be worth extending a slightly larger loan of 91% instead of the 90% (or whatever) normally offered. A borrower with crappy credit might only be worth an 85% loan.

Of course, none of this addresses the real reason why the two appraisals in question were so different, even when considering the 8 month interval and the declining market conditions. I’ll bet you a buck there’s something wrong with at least one of those reports, possibly both.