BPO for PMI Removal???

[Joyce Potts]

PMI removal is an insurance decision, not a mortgage one.

But isn't that insurance decision based on the LTV ratio? Without knowing the value, how do you make that insurance decision?

 

[Offshore]

Joyce the way I see it, whether they order an appraisal or a BPO, the mortgage isn’t affected. PMI is an insurance matter for default and I’m just saying it’s an area where we have little or no say, not that we have much say in matters involving lending in the best of circumstances. I’m by no means saying it’s right, I’d be in favor of a federal law mandating PMI assignments require 5 separate 1004s, unless it’s my loan.

 

[Lee Lansford]

I'm probably begging for it...

Yes, you are.

 

[Fred]

Our reports may be better documented but I have an uncomfortable feeling that when we get into the price predicting business

That’s what the business is. The contemplated sale so subject always postdates the market data. Even if your effective date is today, your conclusions is still what the data “predict” for subject.

Which begs the question. If a BPO is "pretty accurate" then why the $%*$ do we need to be doing an appraisal the way we are?

A question asked by quite a few authors in the last 50 years.

when discussing valuations done by appraisers vs. something-other-than-an-appraiser, the distinction made between the two is usually "USPAP compliance".

What makes that “other than?” For example, USPAP says if they are expected to provide the service in a competent and impartial manner, they are appraisers. Doesn’t the client expect the BPO to be competent and impartial?

On why a BPO is not an appraisal

A. On the report I received, there is no SOW.
B. On the report I received, there is no signed certification.

The cert page is a reporting issue. The first sound one sounds like a reporting issue also. You said, for example, the BPO selected comps, selected listings and used sales comparison. Those are all parts of a SOW. Are you trying to say the report had no SOW section? The valuation work had to have a scope.

So, Steven, to answer your question about scope, yes, I can do what the BPO does, as good as what it does (so I think), and competitively with what it does, if I am allowed to develope the property SOW to follow (which, apparently, the BPO does not have to do!).

What’s not proper about the BPO selecting sales and developing a sales comparison approach?

 

[hastalavista]

I am in slow motion today, so I may not understand your question, but I think I understand your point.

Your point, as I understand it, is that an appraisal, by any other name, is an appraisal.
Am I correct?

Again, I won't argue that point.

However, I will argue that when we talk of an appraisal on this forum, we are generally talking about an opinion of value given by an appraiser, and as such, it falls under the jurisdiction of USPAP.

That is why, when you argue an AVM is an appraisal, that's true. But I would say it is not a USPAP compliant appraisal (and, it doesn't have to be). I find this easier than saying, "An appraisal signed with a certification by an appraiser vs. an appraisal with no certification and no licensed appraiser".

What makes that “other than?” For example, USPAP says if they are expected to provide the service in a competent and impartial manner, they are appraisers. Doesn’t the client expect the BPO to be competent and impartial?

USPAP isn't required to be followed by everyone. One can be required to follow it (by licensing) or by volunteering to do so.
But, without those two ingredients, and unless it is part of the contractual engagement, must one follow it to meet the client's expectations of competence and impartiality?
I don't think so.

On why a BPO is not an appraisal, The cert page is a reporting issue. The first sound one sounds like a reporting issue also.

I agree; it is a reporting issue. The BPO I have is a written report. The certification requirement is for "Each written real property appraisal report".

You said, for example, the BPO selected comps, selected listings and used sales comparison. Those are all parts of a SOW. Are you trying to say the report had no SOW section? The valuation work had to have a scope.


What’s not proper about the BPO selecting sales and developing a sales comparison approach?

Back to the reporting requirement.
If it is a written appraisal report then a stated SOW is required. The BPO is certainly written.

So, if I have this written report, and all written real property appraisal reports must have a stated SOW and signed certification, and my BPO has neither, is it an appraisal report? And if so, is it USPAP compliant?

 

[Jeff Squire]

" Appraisal practice is provided only by appraisers, while valuation services are provided by a variety of proffessionals and others"

"USPAP does not establish who or which assignments must comply. Neither the appraisal foundation nor it's Appraisal Standards Board is a government entity with the power to make,judge,or enforce law. Compliance with USPAP is required when either the service or the appraiser is obligated to comply by law or regulation, or by agreement with the client or intended users."

 

[Joyce Potts]

Yes, you are.

Oh Lee Ann, pulease.

Like I'm gonna back down.

If nothing else, it's entertaining.

 

[Joyce Potts]

Joyce the way I see it, whether they order an appraisal or a BPO, the mortgage isn’t affected. PMI is an insurance matter for default and I’m just saying it’s an area where we have little or no say, not that we have much say in matters involving lending in the best of circumstances. I’m by no means saying it’s right, I’d be in favor of a federal law mandating PMI assignments require 5 separate 1004s, unless it’s my loan.

Richard,

I think I would argue the mortgage IS OR COULD BE AFFECTED. Maybe not short term, but long term it could be.

 

[Fred]

Appraisal practice is provided only by appraisers,

Sure, and golf is played only by golfers.

Your point, as I understand it, is that an appraisal, by any other name, is an appraisal.
Am I correct? Again, I won't argue that point.

You are correct, but it sure feels like you are arguing.

That is why, when you argue an AVM is an appraisal, that's true. But I would say it is not a USPAP compliant appraisal (and, it doesn't have to be). I find this easier than saying, "An appraisal signed with a certification by an appraiser vs. an appraisal with no certification and no licensed appraiser".

An AVM report could include a certification signed by a licensed appraiser. One possible name for that would be “Zaio?” USPAP compliance has to be judged in the context of the intended use. If the client asks for a “BPO” and gets one, the absence of a cert page is a molehill looking for a mountain maker.

USPAP isn't required to be followed by everyone. One can be required to follow it (by licensing) or by volunteering to do so.
But, without those two ingredients, and unless it is part of the contractual engagement, must one follow it to meet the client's expectations of competence and impartiality?
I don't think so.

Isn’t it the other way around? By meeting the client’s (or other reasonable) expectations for competence, impartiality, etc., isn’t the person already “following it?”

Anyway, if you can get the bank to hire you to hire someone else to do BPO’s, then you are the Tom Sawyer of appraisers. Imagine what you could do with general contractor’s license. You could get Arnie to hire you to hire someone else to build highways.

 

[Jeff Squire]

"appraisal practice is practiced only by appraisers..."

just quoting USPAP