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BPO Agent in PA gets smacked with fine

Discussion in 'Pennsylvania' started by jnordquist, Oct 28, 2010.

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  1. jnordquist

    jnordquist Member

    0
    Sep 10, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    Pennsylvania
    The respondent is not certified as a real estate appraiser. She holds a real estate license. Her employer noticed payments on her 1099 received from LSI, a foreclosure company, for two property valuation reports. He reported these payments to the Board. The Commonwealth determined that these reports were appraisals completed without proper certification. Evidence indicates that more than two reports were completed, but additional records cannot be subpoenaed because the company is located out of state. The Commonwealth recommends $2,000 in civil penalties and a cease and desist order. The consent agreement presented by the prosecution was deliberated by the Board in executive session and was approved.
    Board members voiced frustration with the Board’s inability to discipline the company that solicited the reports. Vice-Chair ******* noted that HB2334, legislation to regulate Appraisal Management Companies in Pennsylvania, would prohibit companies like LSI from soliciting Broker Price Opinions (BPOs). The Board noted that BPO requests have increased due to a rising number of foreclosures.
    Chairman ******* noted that HR4173, the Dodd-Frank Financial Reform Bill, prohibits BPOs from being used as the primary basis to determine the value of a piece of property for the purpose of loan origination in conjunction with the purchase of a consumer’s principle dwelling. The provision is intended to codify GSE policies that prohibit the use of BPOs in mortgage loan origination. Board prosecution noted that any state legislation introduced will need to conform to this piece of federal legislation. Discussions took place on whether the Dodd-Frank Bill refers to individuals valuing the loan portfolio, or the loan risk, instead of the property itself. If the property does not change hands it is not considered a financial transaction.
    If this issue continues to raise concerns, the Board will pursue outlets of notifying the public that they are looking at this issue and actively prosecuting these cases. ​
     
  2. NORTON

    NORTON Senior Member

    0
    Oct 10, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    California
  3. Laughing Heir

    Laughing Heir Senior Member

    1
    Oct 16, 2007
    Professional Status:
    Certified General Appraiser
    State:
    Pennsylvania
    I was talking to a Realtor today, the guy sells between 50 and 75 REOs every year. He's my friend, and we talk candidly with each other. He was flipping out about a listing that he's had for several months, it's soooo overpriced that he finally spit the hook. The asset manager will not drop the list price because another agent is 'valuing' the property at its current asking price. We did some research and found out that the Realtor that completed the BPO for the asset management company has been licensed for two years and has sold one house. Talk about experience you can trust ...

    It would be interesting to see if Realtors finally get it through their heads that they cannot complete BPOs and get away with it. Maybe they'll start turning in each other because of situations like the one I described.

    One can hope.
     
  4. Mike Kennedy

    Mike Kennedy Elite Member

    185
    Sep 28, 2003
    Professional Status:
    Certified Residential Appraiser
    State:
    New York
    "If the property does not change hands it is not considered a financial transaction."

    ........Oh? :new_smile-l:
     
  5. jnordquist

    jnordquist Member

    0
    Sep 10, 2007
    Professional Status:
    Certified Residential Appraiser
    State:
    Pennsylvania
    I'm willing to bet that the agents are paid directly for the BPO's, another PA violation.
     
  6. Marion Rhodes

    Marion Rhodes Elite Member

    Top Poster Of the Month

    458
    Feb 26, 2006
    Professional Status:
    Certified General Appraiser
    State:
    Pennsylvania
    Part of the problem comes from the Real Estate Commission and PAR. Check their websites. They maintain that clients really just want a CMA for a listing and are using the wrong terminalogy. It is also legal for Salespeople to be paid for a CMA so long as they have that in writting prior to doing the work.

    But, the new FRB ruling says that salespeople performing valuations are to be protected from cohersion, therefore they can not have the listing. The Real Estate Commission needs to rethink their giant loophole.

    .
     
  7. ARRE

    ARRE Sophomore Member

    0
    Dec 23, 2005
    Professional Status:
    Certified General Appraiser
    State:
    Pennsylvania
    Marion,

    Have you heard anything more about this?? I was just in the class with Joe Fisher (who had nothing but nice things to say about you) in Williamsport, and he didnt have any more info on this problem in PA. I was also speaking with Melanie McLane, and she said the RE commission said they were too busy checking font type in ads to be bothered with anything else. Is this something that can come under the Appraisal Board?

    Thanks,
    Justin Reis, SRA
     
  8. TEL2002

    TEL2002 Elite Member

    2
    Jan 16, 2002
    Professional Status:
    Retired Appraiser
    State:
    Louisiana
    Why didn't the state also go after LSI?
     
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