[ex-Texan]

The most important axiom is "follow the money." The appraiser was not hired by the mortgage company but by the mortgage broker on behalf of the borrower. Who benefited most from the loan? The borrower. How much was the appraiser paid? $ 500? $ 1,000? Who gets the shaft? The borrower and the mortgage broker.

[investigateworld]

I used to do 'expert witness' work in construction biz as a sideline.
The appraiser would be considered an agent of the lender.
The borrower has no control over who is selected for the appraiser.
Again, if there were fraud or collusion, they'd be in a heap-of-trouble. But the appraiser would have a stack of comps, showing from where he developed his numbers. But the borrower would be in the clear.

[VegasCowboy]

What you neglect to mention is that most of these appraisals are not fraudulent. I refinanced a year ago to get a lower interest rate. My home appraised for what homes were selling for in my neighborhood. This was easily verifiable, even by me. One year later I sold my home for almost exactly what it appraised for last year.

If the market drops, the lenders are out of luck if they have to foreclose. If they don't have to foreclose, then it really does not affect them since they are still earning a market rate on their investment.

You still haven't told us why a mortgage company would want to foreclose on a performing loan. To do so would be monumentally stupid.