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

[Michael Tipton]

Are BPOs used for lending purposes required to be USPAP compliant? If so, who regulates their compliance?

The following ad is posted on the AI web site. LSI is/was looking for Florida appraisers to review BPOs for QA purposes. FIRREA thanks for the $250,000 window for alternative valuation tools.

Statewide, FLQuality Control ReviewerLPS-LSILPS-LSI is seeking to fill 5+ positions as Quality Control Reviewers. The job description is as follows: Review and oversight of BPO valuations utilizing research and quality control measures. This position requires the individual to have a Real Estate Appraisal license and would be a work-from-home situation (a virtual network is provided via internet and no "field" work is required). The position pays a Salary base of $35,000 to $40,000 with a monthly bonus structure after 90 days of employment. Job ContactListing posted: 2/09close window

 

[WMOORES]

I know of a few Realtors that are banging these things out like crazy. To the tune of 30+/- a week. When I ask them about USPAP I get the 1000 yard stare. If your a Realtor you are not bound by USPAP, if your an appraiser then you are required to be USPAP compliant.

 

[Kenneth Reynolds]

Can someone in the know tell me where I got the impression that (1)BPOs were price opinions by real estate folks not values.
(2)Real Estate values were to be estimates by licensed or certified re appraisers (3) BPOs could not be used for lending in a federally related trans.

I am constantly learning from you guys on the forum and thanks in advance for any light you can shed on this one.

 

[Couch Potato]

Florida law only requires licensed appraisers to follow USPAP. As long as a broker stays away from FRTs they can appraise all they want.

 

[Kenneth Reynolds]

Then all the transactions done by the GSE's like Fannie & Freddie would require a licensed or certified as what they do is considered FRTs, right?

 

[Dennis J. Black ASA IFAS]

Loans for Fannie and Freddie are NOT FRT's.

 

[Michael Tipton]

FIRREA and banking regs have exemptions for transactions below $250,000. Evaluations (valuation estimates) are permitted below the $250,000 threshold that can be completed by real estate brokers and sales people among others.


Federally related transaction

. The term "federally related transaction" means any real estate-related financial transaction which —​

(A) a federal financial institutions regulatory agency or the Resolution Trust Corporation engages in, contracts for, or regulates; and​

(B) requires the services of an appraiser.



Review the following and additional items within the link to the OCCs banking regulations regarding appraisals and evaluatins.


2231.0.2 TRANSACTIONS NOT REQUIRING THE SERVICES OF A LICENSED OR CERTIFIED APPRAISER
2231.0.9.5 Qualifications of Individuals Who Can Perform Evaluations

http://www.federalreserve.gov/boarddocs/supmanual/bhc/200701/2000p7.pdf​

 

[Howard Klahr]

Florida law requires all appraisals the be performed in adhearence with USPAP, even those performed by real estate licensees. However, BPOs are not appraisals.

 

[Michael Tipton]

Florida law requires all appraisals the be performed in adhearence with USPAP, even those performed by real estate licensees. However, BPOs are not appraisals.

Although BPOs are not appraisals, when they are being used for lending purposes, including loan servicing, valuation review, etc., the education and ethics standard should be equal to an appraisers.

 

[Howard Klahr]

Michael,

While I agree standards for BPOs should be tighter, there are some standards under Realtor ethics that apply although not as rigid as USPAP. However, FIRREA specifically exempts valuation assignments under $250,000 for FRTs. Maybe, the definition of FRTs should be adjusted also.