BPO's

[Residential Appraisal Ser]

Frank & Brad: One of the States that was an exception was Penna. That loophole was closed last year, when a law was passed that required a broker to attend courses to obtain a Broker/Appraiser license. This is a Grandfather license and is only good for Brokers who held a license under the older law. When they die out no new or grandfather licenses will be issued again. PA is the only state that I know of that has a law like this.

William Sentner
President
American Guild of Appraisers OPEIU AFL-CIO
Resasinc@aol.com

 

[bradellis]

Frank,

No, not a generalization at all. Will I stake my license on it- well, that depends. IF the state actually understands USPAP, then I have NO problem with that. The real problem is that many of the states do not understand it. It is THAT fact that might give me pause.

If I am unsure, I'll do it anyway and attach a set of limiters conforming to SR-2 and be done with it. Now, PLEASE tell me that this will not fly. Note that this is NOT a move off my postion- only prudence in the face of less than knowledgeable state boards.

By the way, THIS is one of the reasons I so firmly support federal licensing.

And to Bill- Hiya! I am well aware of the PA law. Guess what? if I call a broker who is not a broker/appraiser (by the way I do have the list of them and call them all the time- that's the broker/appraisers) and tell them I have an REO that needs a BPO. IF your BPO is credible, it may well result in a listing for you. As far as I know, this fully conforms to state laws, or at least that is what PA told me. It also conforms to the laws of virtually every other state, except those that automatically classify BPOs as appraisals and are fully mandatory. Trying to think of one- care to help me out?

Brad Ellis

 

[Francois K. Gregoire]

Frank,

No, not a generalization at all. Will I stake my license on it- well, that depends. IF the state actually understands USPAP, then I have NO problem with that. The real problem is that many of the states do not understand it. It is THAT fact that might give me pause.

Brad,

In many cases, their knowledge of the USPAP would matter little. Their knowledge of the requirements imposed by the specific state law would be the determinant.

If I am unsure, I'll do it anyway and attach a set of limiters conforming to SR-2 and be done with it. Now, PLEASE tell me that this will not fly. Note that this is NOT a move off my postion- only prudence in the face of less than knowledgeable state boards.

Now we're getting somewhere. With a properly determined scope of work decision, consistent with the intended use, intended users, expectations of the client, other market participants and appraisal peers, and sound reasoning in suppport thereof, compliance with the USPAP in the development of the opinion and it's reporting could be as easy as a walk in the park.

By the way, THIS is one of the reasons I so firmly support federal licensing.

I was waiting for this! Wondering why it took so long for you to bring it up. Name three things the Federal Government does well. Is there any evidence we appraisers could expect more efficient and consistent regulation if it was, in fact, centralized in some Federal Agency? Please cite more than one example to support your position.

Here's two examples to support my position Federal Licensing is NOT the way to go:

HUD's maintenance of the Registry of Approved Appraisers. Many appraisers, not meeting the minimum qualification in HUD's own rules, gained a position on the roster. By many accounts, HUD's ability to assure themselves of the skill and competency of their appraisers is limited. Their enforcement actions against underperforming appraisers have been limited and, to say the least, inconsistent.

The Appraisal Subcommittee's oversight of State Regulatory Boards is not consistent. Take a little time and peruse the correspondence between the ASC and State Regulatory Boards in the Field Review Correspondence section of the ASC site. Then read some of the correspondence between the ASC and the States in other parts of the FOIA section. The most severe recent sanction was against the State of New Jersey. They essentially shut the state down, not because there was a lack of appraisal law enforcement in the state, but because the registry fee was not paid in a timely manner.

Both these examples pertain to appraisal. There's dozens, if not hundreds of other examples and reasons not to have our profession subject to more control of the Feds.

Have a super week,

 

[bradellis]

Frank,

Since you asked-

1. Minting money, 2. National defense, and 3. The federal school lunch program.

Now, I am not saying that every state board member is an idiot, as pertains to USPAP, but I'll betcha dollars to doughnuts that I can find at least one on every single state board.

Are the state boards smart enought to ensure that the idiots do not get to hear cases? Not from the anecdotal evidence.

Further, most violations heard by states do not have a thing to do with the state law, with the exception that USPAP is incorporated by reference into most state laws. Most sanctions are the result of USPAP violations- or at least the "perception" that they are violations, as interpreted by the state boards. Might be different in FL, but the many state appraisal directors I have talke dto confirm that USPAP is the primary basis for most cases.

Now Frankie, I am aware that you got appointed to your board by W's brother Jeb, and no jokes about the Fla count, either, but...

The Repubs have telling us for decades that the feds do not know what they are doing and that only the states can get it right. Well, old Mr. Clinton (warts and all) proved that to be false. In fact- and you can certainly check this out- the economy almost always does better under Dem federal control than under the Repubs.

Smaller federal government is not always better, nor is the assumption that the state can perform better than the feds. Sure, graft and corruption at the federal level is on a more grandiose scale, but the scandals at the state level are just as frequent as are the foibles and errors.

In IL, the governor cannot run for reelection because many of his aides when he was secretary of state just got indicted. Mike Brown (a friend of mine) is actually trying to pass admin rules that tell an appraiser what is and what is not a comp. In NC, many appraisers are screaming about actions of their board. In NV, the board said that you could not do an FHA inspection if you were not licensed as a home inspector- almost happened in TX as well.

Finally, in CA, my own license is being held up because two of the courses I took for basic licensing- in IL- and they were NAIFA courses that are the very same courses that were approved in '92 by California- would not count because I took them prior to CA aproving them. Thankfully, they will accept them since I taught them subsequently, but it meant I had to provide certifed proof of teaching them- letter from NAIFA on the letterhead, signed by the EVP with dates, locations, etc. AND a course outline (the VERY SAME OUTLINE THEY USED TO APPROVE THE COURSES IN 1992). Now I have to wait until they can "approve" the courses they have already approved.

So, you were saying...?

Brad Ellis

 

[Dale Smalley]

Ok
Once again there are no yes no answers.

We order BPOs to get information not found in an appraisal. Mostly condition not listed as AVERAGE. Brokers can tell us about crime, drugs sales on the corner, the effect of vacant and boarded up homes.declining markets, etc...you get the picture. They can say whatever they want. I want more about what is happening in the area like factory closings, floods stuff that effect the entire market.
No offence to your skills Brad, but we want the down and dirty for cheep. And most are done in 2-3 days time.
If you could get Frank to actually say YES an appraiser/Realtor can do a BPO without any consideration to USPAP then you might be able to open up a multi million dollar market for appraisers/ Realtors.

Untill then dont risk your appraisal license doing BPOs

 

[Caterina Platt]

Dale,

If you are getting BPO's with crime stats and such, you have some Realtors that are walking the 'red lining' issue. Not any more acceptable for a Realtor to red line than it is for an appraiser (or lender for that matter). Declining markets, bad micro economic condtions, and external depreciation, if they exist, are not red lining. Crime stats, drug deals on the corner, etc. are verging into the red line zone.

It also sounds as though you are looking for an honest field review when you state 'condition other than average'.

Are these BPO's you refer to ordered on purchases and refi's? If so, what a classic example as to why the lender should not employ the appraiser. You'd get more honest reports from the get go and not have to search for the honest second opinion. If these BPO's are being ordered for REO appraisals to obtain more descriptive data, what a shame. The REO appraisal is the time when you should be recieving the shocking truth directly from the appraiser. If you are not recieving blatant honesty on an REO appraisal, it's time to switch appraisers.

 

[Francois K. Gregoire]

Ok
Once again there are no yes no answers.

We order BPOs to get information not found in an appraisal. Mostly condition not listed as AVERAGE. Brokers can tell us about crime, drugs sales on the corner, the effect of vacant and boarded up homes.declining markets, etc...you get the picture. They can say whatever they want. I want more about what is happening in the area like factory closings, floods stuff that effect the entire market.
No offence to your skills Brad, but we want the down and dirty for cheep. And most are done in 2-3 days time.
If you could get Frank to actually say YES an appraiser/Realtor can do a BPO without any consideration to USPAP then you might be able to open up a multi million dollar market for appraisers/ Realtors.

Untill then dont risk your appraisal license doing BPOs

Dale,

Frank does not make the rules.

Neither have I said real estate brokers / licensed-certified appraisers cannot complete BPO's. The market is open. It's the USPAP Compliance issues which are not cut and dried.

BTW, nearly all of my real estate broker/salesperson friends and acquaintances (quite a bunch) refuse to do them because of the detail required in return for the compensation and hassel involved.

 

[Dale Smalley]

Caterina

I work for investors that buy loan packages on the secondary market. So to be specific about crime and such is not the important factor. As in most business decisions it is all about time and money. BPOs are ordered for many reasons and have justified their cost to the company in many ways.

I don’t want to get into what is good or bad about them here as we were discussing whether an appraiser/ Realtor could do them. I was hoping to pin Frank down for an answer. But he is a better politician that that. However it sounds like you can do a BPO if you add the certification and limiting conditions as an appraiser. And again there may other USPAP compliance issues to consider. In effect this would become a drive by with 3 comps and 3 listings for $50-$80.
That would leave it up to the individual Appraiser / Realtor if it worth the hassle

 

[Joe Birrell (NY)]

Richard and other Realtors:

Please stop towing NARs party line and being so defensive about the nobility of Realtors. I am well aware of what is going on out there and so is everybody else. There are some Realtors who are ethical and honorable people (just like some appraisers), and I'm sure you're one of them. However, the vast majority are NOT. They are not friends of appraisers. They have done everything in their power to dilute our appraisal industry. They are obsessed with image and propaganda. Nobody, including the general public believes it. And yes, NY does have a Board of Realtors, which is one of the root causes of a licensing law with loopholes in it for Realtors. Also, please spare me the reasons why a BPO is a good thing, that's not what we are taking out here. Let them do BPO's until they turn blue, but not in place of an appraisal. Stop the spin and take an honest look at the situation.

 

[Francois K. Gregoire]

Frank,

Since you asked-

1. Minting money, 2. National defense, and 3. The federal school lunch program.

Brad,

Are those the best examples you can offer? Which one, by implication, provides the best evidence the Federal Government could do a credible job of developing and administering an effective licensing and regulatory system for real property appraisers?

Alternatively, consider these questions. Since the Federal Government became involved in the licensing and certification of real property appraisers (TITLE XI of FIRREA), has the state of our profession improved or declined? Are appraisers now more qualified? More experienced? More honest? More ethical? Is their work product better? More accurate?

My experience is limited to Florida. My only comment with respect to Florida is it is much easier to become an appraiser now than it was prior to 1990. Although every single Florida real estate licensee was legally qualified to appraise real property for others for a fee prior to 1990, their qualifications and education were subject to much closer scrutiny by the market and their clientele. This has been significantly diminished since licensing beacuse the State now says they're qualified (according to Federal - AQB - Standards)

Now, I am not saying that every state board member is an idiot, as pertains to USPAP, but I'll betcha dollars to doughnuts that I can find at least one on every single state board.

You're tempting me here. I might just head on over to the Krispy-Kreme and take you up on your challenge. Let's first reach an agreement as to the definition of "idiot, as pertains to USPAP" and who wil serve as the judge.

So, you were saying...?

Brad Ellis

Still saying you have yet to make your case. Still listening, however.

Frank