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Like doing BPOs?--Go West Young Man or Woman

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Elliott

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Elite Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Oregon
From Oregon Real Estate News-Journal, December 2007, Gene Bentley, Real
Estate Commissioner

"The [Oregon Real Estate] Agency has been asked for guidance in performing Broker Price Opinions (BPO). The following services can be provided without first being licensed as a real estate appraiser. Analysis of an interest in real estate property can be performed for ownership or collateral purposes for financial institutions, provided that the analysis is used for internal purposes only and that any any loan transaction at issue is valued at less than $250,000. Therefore, a real estate licensee can analyze real estate for purposes of a lending collateral analysis. A licensee can also perform a default collateral analysis when performed for internal use of a financial institution.

Licensees may perform these services under an exemption to the appraiser
licensing law [ORS 674.100(3(a)]...."an insured depositor institution as defined in section 3 of the FDIC Act or an insured credit union...


I guess my question is, "Why have appraisers?" Get your real estate license
and eat appraisers lunch, punch out CMAs in two minutes for your regular clients,
and use your appraiser license for the occasional 'non-conforming BPO' assignment.
 

hastalavista

Elite Member
Joined
May 16, 2005
Professional Status
Certified General Appraiser
State
California
Elliot-

I don't see the big deal.
If I read and understand the letter correctly, it says the following:

An entity can use a non-appraiser for collateral valuation for non-lending/internal decision-making purposes.
If an entity wants to use the collateral valuation for a lending decision, then an appraiser needs to be engaged.

Did I misinterpret the letter?
 

Elliott

Thread Starter
Elite Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Oregon
Denis,
I don't know how big a deal it is. At times I feel like the frog
who was put in the pot of cold water and the temperature is
getting hotter and hotter, soon I might just be completely cooked.

Let's see, what's happened since federal licensing....low entrance
standards, skippy mills, lenders using BPOs, comp checks,
AMCs, AVMs, data mining....and probably a bunch more I
can't think of because---whew, this water is getting warm.
Oh yeah, and how Fannie rolled concessions into MV and
made them invisible...and of course, the Subprime mess
which is why we are probably headed into recession.
 
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jnordquist

Member
Joined
Sep 10, 2007
Professional Status
Certified Residential Appraiser
State
Pennsylvania
Within The Notes Of The Pennsylvania Board Of Certified Appraisers Meeting For November, They Have Stated For The 50th Time BPO's Are Not Permitted And They Are Looking Into Lender Discipline And The Companies That Originate Them. Will It Ever Happen I Don't Know, But It Is A Start.
 

Michigan CG

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Joined
Nov 1, 2006
Professional Status
Certified General Appraiser
State
Michigan
Let's put this in perspective. DO the banks really need an appraisal? There are so many foreclosed homes out there that getting Market Value is not really the objective, but rather just getting rid of them.

I watched a house in Michigan built in 2004, it went into foreclosure and was listed right around Market Value(229,900). However, the list price was dropped $10-15k every four weeks or so until it finally sold for under $175k.

I don't think they really need an accurate Market Value estimate, they just want a ball park smaller than Comisky.
 

Elliott

Thread Starter
Elite Member
Joined
Apr 23, 2002
Professional Status
Certified General Appraiser
State
Oregon
Tim,
Banks probably don't need appraisals, but people who
lend money to them (bond holders) actually aren't
happy when they get 100% of their money back,
they want 100%+interest. E*Trade wanted out of
CDOs and got 27% of their money back. How soon
we forgot the S&L bailout.
 

Lloyd Bonafide

Senior Member
Joined
Jan 15, 2006
Professional Status
Certified Residential Appraiser
State
California
Let's see, what's happened since federal licensing....low entrance
standards, skippy mills, lenders using BPOs, comp checks,
AMCs, AVMs, data mining....and probably a bunch more I
can't think of because---whew, this water is getting warm.
Oh yeah, and how Fannie rolled concessions into MV and
made them invisible...and of course, the Subprime mess
which is why we are probably headed into recession.

Yeah, it's all good - m2:
 

Terrel L. Shields

Elite Member
Gold Supporting Member
Joined
May 2, 2002
Professional Status
Certified General Appraiser
State
Arkansas
Evaluations were exempted from regulation by Federal Law. No state can stop a Regulated institution from using an in-house evaluator. Often they are a designated loan officer or a hired person who has a RE or lending background. My brother was the in-house evaluator for a bank during the last 2 years he was able to work. He never held a RE license nor appraisal license. But he had 35 years of lending experience and took appraisal classes as a loan officer years ago when that was the norm for most all loan officers.

These are NOT BPOs! They are NOT done on secondary market loans. They can do BPO's ONLY if they are Realtor Brokers in most states. But they can do a letter appraisal which addresses only those items required under FIRREA. Again this is FEDERALLY REGULATED institutions. Mortgage brokers cannot hire "evaluators" and these laws have been on the books since day one. They typically are simply written out on a small form or typed up in a letter. And typically they are loans where the LTV ratio is 80% or less, often much less. Borrowing $20,000 for a new bass boat against your paid for real estate makes sense if you can take the mortgage deduction over using the boat as collateral and that's why people do it.

And again, they are not "Broker" price opinions. They are Evaluations. Outfits that use BPO's generally are unregulated institutions who sell loans to outfits who allow BPO's and AVM's to be a substitute for an appraisal.
 
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TEL2002

Elite Member
Joined
Jan 16, 2002
Professional Status
Retired Appraiser
State
Louisiana
HOw about appraisers listing and selling property....as long as it is below $250K, and the property is being sold by the owner and will be lived in by the purchaser.:rof:

With appraiser's track record of working for almost nothing for the AMC's, I bet we could have the listing/selling commissions down to 1% in a matter of months.
 
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