Muni insurance is a low risk high profit business. Buffet is taking advantage of the insurers weakness to get a slice of that and the market is acting like "we are saved" If Buffet insures the MUNI bonds then presumably it requires less capital for an AAA rating to be maintained, but it doesn't...
The first issue is if the property was purchased at market value at the time of purchase. This can be determined reasonably close by reviewing comps and properties for sale.
The appraiser and the loan broker are just trying to make the deal happen and their opinion of the value is used to...