BPO's in Michigan

[Michigan CG]

My quest for making it illegal for mortgage brokers asking for Comp Checks is not over (since it is illegal for me to give them out) however........

I had to attend a meeting/class at the local Realtor office since I have the MLS. It is basically a class on Realtor ethics and some other stuff. During a break the Realtors were talking about BPO's. One guy bragged he was doing 15 a week. Another guy was doing close to that.

I thought this was illegal, and if it is who is ordering these? And is anyone doing anything about it, and what does the State think about this?

I have seen two of my Board members post on this site and wonder what their opinion of these subjects is, and if there is anything that can be done.

 

[Ruben Ramon]

My understanding is that if a sales agent/broker is uttering an opinion of value for anything other than to try to get a listing, than its an appraisal, and a violation of the Occupational Code. Its been a while since I've researched it, but I do know that its VERY common. I believe banks order BPO's on properties as part of their REO process. I've been involved from an investor point of view and dealt with a "BPO," and its been very frustrating. I've even heard of banks calling the BPO's appraisals. That is how they treat them. My understanding of the Occupational Code is that since its basically an unlicensed appraiser doing an appraisal, DLEG cannot handle it. It has to be the Attorney General or the local prosecutor. Unless the occupational code changes or the legislature gives DLEG the power to handle BPO's in the light of a regular complaint against their license, I don't see much hope for any change.

 

[Wolverinefan]

BPO's have pretty much taken over for appraisals in the REO market. I use to do a ton of REO's when the market first started to collapse. Then as the market collapsed the banks wanted to cut there losses and stop appraisals in favor of BPO's. They pay like $50 for a BPO versus $300+ for an appraisal. BPO's can't be used for financing, just for setting a sales price.

 

[Michigan CG]

BPO's have pretty much taken over for appraisals in the REO market. I use to do a ton of REO's when the market first started to collapse. Then as the market collapsed the banks wanted to cut there losses and stop appraisals in favor of BPO's. They pay like $50 for a BPO versus $300+ for an appraisal. BPO's can't be used for financing, just for setting a sales price.

But if it is illegal for a Realtor to do BPO's for any other purpose other than listing the home the banks are asking for something illegal when that is not the purpose.

 

[Mary Tiernan]

Also keep in mind a realtor cannot do a BPO only a broker . . .

 

[JRS at OBX]

Also keep in mind a realtor cannot do a BPO only a broker . . .

Yeah right!! If these companies cared who gave the opinion of value, they would hire an appraiser.

 

[Mary Tiernan]

Welll perhaps we Michiganders need to send a letter to our representatives and ask them what it is we should do when we find out realtors are doing BPO for financing purposes.

There is a fund now for mortgage fraud - it is funded with half the license fees of real estate license dues.

Problem, I don't think mortgage fraud was ever defined. I tried. But when 1 person tries, nothing gets done unless you can do it on a full-time basis. Perhaps if we all wrote our representatives to ask about the mortgage fraud fund, its purpose, and the rule about BPO and lenders utilizing BPO in the state of Michigan, we might get some answers?

 

[Mary Tiernan]

I know the MAR magazine recently had an article reminding realtors about the Michigan rules.

Maybe we need to let MAR know it is still going on and ask them what are the consequences?

 

[David Molenaar]

The is from the Michigan Assocation of Realtors Magazine

http://www.mirealtors.com/news/realtor/documents/brokeropnov07.pdf

 

[hglenbetts]

I'll look for the link, but the OC states that a person licensed as a sales person may never take a fee for offering an opinion of value (BPO, CMA). Only a Broker my receive a fee for this service. It also states that both a sales person and a Broker can only offer an opinion of value in the course of securing a listing, or assisting buyer/renter in the course of preparing a offer to purchase/lease.