Are BPOs used for lending purposes required to be USPAP compliant?

[Joyce Potts]

Here we go with the semantics game again. I love it when Realtors who do BPO's for Fannie or Freddie are exempt from USPAP. BPO's aren't appraisals? What's an appraisal? If Realtors are rendering VALUE OPINIONS for collateral backed by the tax payers, I don't know--maybe it's just me--but it seems like that's a tad dangerous if not disengenous.

 

[Michael Tipton]

Here we go with the semantics game again. I love it when Realtors who do BPO's for Fannie or Freddie are exempt from USPAP. BPO's aren't appraisals? What's an appraisal? If Realtors are rendering VALUE OPINIONS for collateral backed by the tax payers, I don't know--maybe it's just me--but it seems like that's a tad dangerous if not disengenous.

By nature, Realtors are advocates for their client. An independent mind set might prove to be bothersome.

 

[Kenneth Reynolds]

The FRT definition and the exemption for loans below $250k doesn't appear to alter the fact that a federally related transaction is taking place. The fact that a federal agency has exempted loans below $250k is regulating the transaction, no?

 

[Dennis J. Black ASA IFAS]

It is not a question of liking the definition or not. FRT's are defined in FIRREA and almost ALL residential loans DO NOT meet the definition. The fact that the tax payers are now footing the loses is not relevant.

Plus BPO's for foreclosure action and marketing are not LENDING items at all.

 

[Howard Klahr]

The fact that a federal agency has exempted loans below $250k is regulating the transaction, no?

The federal agency to which you refer is the US Congress. FIRREA, which is federal legislation passed by congress, contains the definition of a FRT, the exemption and the amount. The fact that the vast majority of residential lending falls outside the definition did not go unnoticed by those drafting the regulation.

 

[Couch Potato]

Here we go with the semantics game again. I love it when Realtors who do BPO's for Fannie or Freddie are exempt from USPAP. BPO's aren't appraisals? What's an appraisal? If Realtors are rendering VALUE OPINIONS for collateral backed by the tax payers, I don't know--maybe it's just me--but it seems like that's a tad dangerous if not disengenous.

I agree with your sentiments, but the only way it will change is if the Florida legislature adjusts the law requiring USPAP compliance to include license real estate agents giving written value opinions. For now the law just applies to those licensed as appraisers.

 

[Howard Klahr]

I agree with your sentiments, but the only way it will change is if the Florida legislature adjusts the law requiring USPAP compliance to include license real estate agents giving written value opinions. For now the law just applies to those licensed as appraisers.

Actually, if a real estate licensee performs an appraisal, which is permitted under current state law, that appraisal must conform to USPAP. This is part of the regulations for real estate licenses thanks to Frank's efforts while he was on FREAB.

The issue as it relates to this thread is that in Florida, BPOs are not considered appraisals.

 

[Kenneth Reynolds]

It's easy for me to get confused by semantics, but I have always thought that price and value were different and that re licensees addressed price and the licensed/certified appraisers addressed value.
I did not know that re licensees could perform appraisals that conformed to USPAP. I thought USPAP only established standards for appraisers.
How are the re licensees held accountable when straying from the USPAP standards?

 

[Couch Potato]

Actually, if a real estate licensee performs an appraisal, which is permitted under current state law, that appraisal must conform to USPAP. This is part of the regulations for real estate licenses thanks to Frank's efforts while he was on FREAB.

The issue as it relates to this thread is that in Florida, BPOs are not considered appraisals.

I've heard people say they must follow USPAP, but I've never seen it in the laws or regulations for real estate licensees. Could you please point it out?

 

[Francois K. Gregoire]

I've heard people say they must follow USPAP, but I've never seen it in the laws or regulations for real estate licensees. Could you please point it out?

Here you go:

475.25 Discipline.-- (1) The commission may deny an application for licensure, registration, or permit, or renewal thereof; may place a licensee, registrant, or permittee on probation; may suspend a license, registration, or permit for a period not exceeding 10 years; may revoke a license, registration, or permit; may impose an administrative fine not to exceed $5,000 for each count or separate offense; and may issue a reprimand, and any or all of the foregoing, if it finds that the licensee, registrant, permittee, or applicant:
....
(t) Has violated any standard for the development or communication of a real estate appraisal or other provision of the Uniform Standards of Professional Appraisal Practice, as defined in s. 475.611, as approved and adopted by the Appraisal Standards Board of the Appraisal Foundation, as defined in s. 475.611. This paragraph does not apply to a real estate broker or sales associate who, in the ordinary course of business, performs a comparative market analysis, gives a broker price opinion, or gives an opinion of value of real estate. However, in no event may this comparative market analysis, broker price opinion, or opinion of value of real estate be referred to as an appraisal, as defined in s. 475.611.

Source:

http://www.leg.state.fl.us/Statutes/index.cfm?App_mode=Display_Statute&URL=Ch0475/ch0475.htm