The Appraisal ROV Trap: A Growing Concern for Appraisers and Lenders

In today’s challenging real estate market, appraisers are facing a growing number of Reconsideration of Value (ROV) requests—often misused and misunderstood.

While ROVs were intended as a formal mechanism to address legitimate concerns with an appraisal report, their current implementation has increasingly become a loophole for challenging objective valuations based on subjective interests.

What Is a Reconsideration of Value (ROV)?

An ROV is a formal request—typically initiated by the borrower or through the borrower by a third party such as a real estate agent—to reassess the appraiser’s opinion of value.

According to Fannie Mae, the borrower may submit up to five alternative comparable sales, with supporting information that identifies perceived inaccuracies or omissions in the appraisal report.

But here's the issue: those initiating ROVs are often the parties with the most vested financial interest in a higher valuation.

The Problem: Misuse and Lack of Objectivity

ROV submissions frequently come from borrowers or agents unfamiliar with valuation methodology. Most ROVs lack credible supporting documentation or analysis as required by Fannie Mae. Instead, they may rely on inaccurate cost-per-square-foot comparisons or cherry-picked high sales without adjusting for critical differences—such as location, condition, amenities, or lot characteristics.

This shifts the burden of review from the lender’s desk or field review process directly onto the appraiser. Worse, it often forces appraisers into a defensive position, re-analyzing data already considered and in most cases already addressed in the appraisal—without compensation.

A False Sense of Transparency

In many cases, ROVs are used to bypass a formal lender review or second appraisal, placing the weight of the dispute solely on the appraiser’s shoulders. Even when the original appraisal was developed using robust data sets, advanced tools (like Spark or Synapse), and included over 6 comps in the report (with often 15-20 properties considered) reviewed and analyzed, the appraiser is asked to justify their work again.

This is the equivalent of asking an employee to write their own performance evaluation before a raise—knowing that criticism may follow either way.

Market Conditions Make It Worse

The broader market context compounds this issue. Across the Dallas–Fort Worth metroplex and beyond, home values have seen shifts due to rising interest rates, inflation, and economic uncertainty. In places like Florida and California, we're seeing record-high inventories and longer days on market. Even Fannie Mae’s “blacklist” of certain condo projects is dampening demand in parts of South Florida.

These factors naturally affect property values, but rather than accept those market condition changes, some stakeholders attempt to use the ROV process to challenge appraisers who are simply doing their job.

A Call for Greater Transparency and Fairness

To ensure ROVs serve their intended purpose—and not as a disguised attempt to pressure appraisers—a few reforms are necessary:

1.   The lender’s internal review should be completed and shared with the appraiser before any ROV is initiated. Fannie Mae requires the lender to review the appraisal prior to ROV submission. Sharing that review fosters transparency and may validate the original opinion of value.

2.   ROV requests should include meaningful and credible support—not just sales data, but also commentary explaining why the proposed comps were not used or how they better bracket the subject.

3.   Lenders must recognize the risk of weaponizing ROVs. These disputes can be flagged and later used in repurchase demands from GSEs or in legal actions, even when the appraisal was fully compliant.

Let’s not forget: Most loan defaults occur due to economic hardship or health issues—not because of inflated or deflated appraisals.