Have banks become stricter when evaluating home appraisals?

Yes. For example, say appraisal is supported by 6 past sales ranging from low to high. In the past, lenders would accept an average cost. Now bankers may only look at the 3 lowest-priced comparable sales. Worse, many lenders have appraisals critiqued by clerical workers in the underwriting department, whose ignorance regarding appraisals can have disastrous results. This practice also makes it hard to increase prices following a down market.

In the past, some lenders and appraisers colluded to jack up home values. Now, Fannie Mae and Freddie Mac lenders are required to hire independent appraisers from a blind rotating list. These appraisers may not even know the neighborhood, which can result in dramatic valuation errors. Local, non-Freddie Mac lenders can still draw from a list of known and vetted appraisers, but are bound by law not to influence them to deliver a certain value. Sometimes the local lender can save the day using a good local appraiser.