While there are some independent appraisers (used mainly by mortgage brokers), the majority of appraisers are employed full-time by the lender, who, of course, wants to lend money, that is his job, and his appraiser understands that. Even the independent appraisers understand that if the homes they appraise don't come up to value too many times, the mortgage broker will not call them for the next appraisal.
The lender may later package the loan he originates for resale on the open market, and a buyer in New York can feel confident purchasing a mortgage originated in California, because the appraisal criteria are standardized nationally. Of course there are abuses, and fraud does occur, but that is the exception, and happens to some extent in every business.
Basically, everyone in a sale transaction has a vested interested in having the home appraise for the full amount because if it doesn't, the deal falls through, the seller can't sell, the buyer can't buy, and no one else in the transaction (Realtors, escrow, title, insurer, lender, etc.) gets paid, with the exception of the appraiser who is the only one without a vested interest in the outcome, since he usually is a salaried employee of the lender.
Newly
