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Old 01-07-2009, 12:13 PM
Riick's Avatar
Riick Riick is offline
Join Date: Aug 2007
Location: DuPont: "Better Living through Chemistry"
State: Delaware
Professional Status: Certified Residential Appraiser
Posts: 9,140
Default FNMA: Appraisers get no respect

It surely looks to me that FNMA believes a BPO = Appraisal

There is a loan modification program that the FHFA has started called the “Streamlined Modification Program” (SMP)
Designed to restructure "troubled" Fannie Mae/Freddie Mac loans.

From: FNMA Announcement 08-33
Determining eligibility for the SMP – LINK

Read it and weep:
The mark-to-market LTV is determined by dividing the total first lien mortgage loan
balance due by a valuation provided by Fannie Mae or an appraisal, or an estimated sales
price from a BPO. To be eligible for the SMP, the ratio must be equal to or greater than
90 percent.

If the servicer has previously obtained an opinion of market value or estimated sales price
for a property securing the delinquent mortgage loan through either an appraisal or a
recent BPO (within 90 days of the date the servicer is determining SMP eligibility), the
servicer may use it to determine the mark-to-market LTV. Automated valuation models
(AVMs) may not be used for this purpose.

If a servicer has not previously obtained a recent appraisal or BPO for a property securing
the delinquent mortgage loan, the servicer should obtain a valuation from Fannie Mae
through HSSN for purposes of calculating the mark-to-market LTV by submitting a
request to Fannie Mae.
“If you would know who controls you, see who you may not criticize.” - Tacitus -Rome 96 A.D.
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Old 01-07-2009, 12:21 PM
GCJim's Avatar
GCJim GCJim is offline
Join Date: Dec 2007
State: New Jersey
Professional Status: Certified General Appraiser
Posts: 2,443

Surprising, idn't it? Actually, I'm not THAT surprised. I'm REALLLY surprised that they have dis-allowed AVM's. Going that route would be more consistent and fit thier track record of 'garbage in = garbage out' much better, imo.

Nice avatar of 'Uncle Bernie', btw.
Old 01-07-2009, 12:52 PM
panappr panappr is offline
Join Date: Dec 2007
Location: Los Angeles
State: California
Professional Status: Certified Residential Appraiser
Posts: 4,786

Why don't they attach that 1004MC requirement to the BPO if they are so concerned about market conditions? Or was that just to try and slow appraisers down a little bit more? The whole BPO industry is a slap in the face to the appraisal profession.
Old 01-07-2009, 07:03 PM
Bama Bayou Bama Bayou is offline
Join Date: Oct 2006
State: Alabama
Professional Status: Certified General Appraiser
Posts: 1,313

I think it may be time for the AG's and/or the appraisal boards in the mandatory states to send FNMA a nice letter informing them that they are ordering an illegal product if they pay a fee for a BPO prepared by someone who does not have an appraisal license.

The brokers who prepare these in my state know that it is illegal but they have the attitude of "I'll do it until I get caught". They never get caught. Why would FNMA trust someone with that attitude? Why do they continue to order illegal appraisals from brokers in mandatory states who are not licensed to do them?

It's kind of like, well, you know, we really trust these BPOs even we order them from brokers who are breaking the law by providing them. What the hell?
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