A recent working paper by the Federal Reserve Bank of Philadelphia looked at the impact the Home Valuation Code of Conduct has had on the outcome of appraisals and mortgages. Inflated appraisals, which contributed to the housing bust, were replaced by low appraisals during the housing-market collapse. But the study indicates that the impact of low appraisals also may be problematic because higher levels of loan rejections put a damper on the housing market.
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