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Banning BPOs as "appraisals" for FRTs

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Mike Kennedy

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http://www.workingre.com/workingre/AR-Bills-540-1035.pdf

Christmas Wish List - may this Legislation be cloned in EVERY State!!

Kudos to the Arkansas Appraisers Association!!!! :beer: :clapping: :clapping:


Memo - September 1, 2007 BPOs and/or Appraisals

There is a new article located in the "Useful Forms and Documents" section of this website. This article, which was in the August issue of REALTOR Rightings, written by Andy Schaus, the Executive VP of the Arkansas Realtors Association and a former appraiser, explains better than I have as to the differences in Arkansas between BPO’s and APPRAISALS. Andy wrote this in response to the legislation sponsored by the Arkansas Appraisers Association (Act 17-14-303 of 2007). Please make certain that this information is well-circulated in your area of the State and that you don’t hesitate to report those in violation of it. Pay particular attention to the next publications in the next issues of The Communicator Magazine and Working RE Magazine. Both of these appraisal magazines are doing articles on the pro-appraiser legislation originating in Arkansas that has been sponsored by the Arkansas Appraisers Association. We certainly hope that this mind-set spreads throughout the country with the upcoming focus on predatory lending that is sure to result from the failures in the mortgage industry as a result of habitual sloppy lending practices.

Tom M. Ferstl
Executive Secretary
Arkansas Appraisers Association

http://www.arkansasappraisersassociation.com/
 
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Joyce Potts

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Hold on a just a second. If you're talking about BPO's used for making Federally Related LOAN TRANSACTIONS, I would agree 100%.

If, however, you're talking about obtaining a BPO (Broker's Price Opinion) or a CMA (Competitive Market Analysis) by a Real Estate Agent or Broker, be careful what you wish for.

Most lenders are using BPO's to establish the market value for listing purposes before, during or after they've foreclosed. If a lender doesn't want to spend the big dollars for an appraisal that is NOT related to making a loan, I really don't see the legal or ethical concern here.

Most of the lenders and/or asset recovery companies are only ordering appraisals if they suspect the original appraisal was inflated or misleading/fraudulent in some other way, but even review appraisals for those purposes have waned as many are just not prepared to go after those appraisers, for a variety of reasons. All they care about now is liquidating that property quickly and getting it off the books .
 

Jozsef Poor

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In Florida a Real Estate Broker can not call his CMA an appraisal. Section Section 475.612, 27 FS, mandates that real estate licensees who perform comparative market analyses of real estate in the ordinary course of business may not refer to or represent the CMA as appraisals.
 

Carnivore

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a rose by any other name...
 

OSU Beavers

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I think the Oregon ACLB tried to do something like this back in 1994 by suing Chicago Title over BPOs, but we got our @sses kick in a counter suit. If I recall correctly we ran out of money before they did so both suits were dropped.
 

Lawrence R.

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I didn't read the statute, but the summary says that you can't use the words Market value or blah blah blah,

It doesn't say they can't use one, it just says you can't do a BPO and call it market value.

This won't change a darn thing.
 

Lawrence R.

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In Florida a Real Estate Broker can not call his CMA an appraisal. Section Section 475.612, 27 FS, mandates that real estate licensees who perform comparative market analyses of real estate in the ordinary course of business may not refer to or represent the CMA as appraisals.


That is right, but if someone wants to USE it as/instead of an appraisal, they can.

Call them whatever you want, the problem is that the conclusions in those reports are governed by NOTHING at all. There is no guarantee by any licensing authority that a BPO is worthy of making a lending decision from.

All they have to do is say likely price, target listing value, transaction estimate, bla bla blech, and they comply with that teeny little flaccid statute.
 

Walter Kirk

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New Jersey
BPO's are being used as appraisal substitutes and lenders, brokers, and courts are accepting them. The reasons for this is that there are (in most areas) no real penalties for appraising without a license and many people don't understand the difference between a real appraisal and a BPO,CMA, AVM or other hokus pokus
 
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