States who prohibit BPOs as alternatives for Appraisals

[Greenback]

I rarely start threads. I may have started 5 to 10 threads since being a member of this forum.

I have a reason and a purpose for starting this thread. I would like to know of all the states who have laws in place that prohibit BPOs and CMAs being used for mortgage lending purposes, etc.., and being compensated for providing such a so-called evaluation/valuation.

If you have the time to post your states law (a link, possibly) with regard to BPOs/CMAs, I would appreciate it. I would like to review these laws. I admit that I should know who these states are and the verbiage saved on my computer, but I don't.

Louisiana, as for as my knowledge goes, do not prohibit BPOs/CMAs providing this service to lending institutions and beyond. I would like to change that. If someone from Louisiana can show me evidence that Louisiana does prohibit this type of activity, I would appreciate it, as well.

For the states who do not have laws in place with regard to the above, it's a good time to fight for it.

Sincerely,

 

[JTip]

Not sure how to post a pdf, here is a copy discussing Pennsylvania rules:

Real Estate Commission FAQ 3/20/2009
Disclaimer: The information on this page is not to be construed as legal advice by the Commission, the Bureau of Professional and Occupational Affairs,
the Department of State or the Office of General Counsel. Rather, it is being listed for informational purposes only. For responses to any factual
situations, contact your attorney.
APPRAISAL ACTIVITES
What is the correct procedure when a real estate office receives a call from a third party company asking that real estate licensee to perform a broker price opinion (BPO)?
Real estate licensees are not permitted to perform BPOs under their real estate licenses. A BPO is an appraisal and can only be performed by someone who holds an appraisal license—such as an appraiser or a broker/appraiser. That being said, however, sometimes companies ask for a BPO when all they really just desire a comparative market analysis (CMA). Real estate licensees may provide CMAs if the CMA is being performed in order to obtain the listing. Remember, the CMA must have the disclaimer language contained in the RELRA. A discussion about BPOs and CMAs appears on the Commission’s web site at www.dos.state.pa.us/estate under “BPOs v. CMAs” and in an article by Dan Bradley in the most recent newsletter also available on the website.

 

[Mr Rex]

From a recent(2009) NCREC bulletin:

Be Wary of Performing “Broker Price Opinions”

The Commission has noted an increasing number of reports of brokers providing, for a fee, a “broker price opinion” (BPO) for a party who is not a client or potential client of the broker.
The downturn in the real estate market has apparently resulted in more demand for informal estimates of the most probable sale/purchase prices for properties that are less expensive than a full appraisal.
Brokers may be requested by lenders, loan servicers, potential investors or others to provide this service for a fee, or brokers may simply be seeking alternative sources of income in a slow market.
Brokers should remember that the North Carolina Appraiser Act requires any analysis, opinion or conclusion as to the value of real estate performed for compensation to be performed by a licensed or certified appraiser.
However, the statute does provide a limited exception to this requirement that permits real estate brokers to perform a “comparative market analysis” for compensation ONLY for prospective or actual brokerage clients or for real property involved in an employee relocation program.
A “comparative market analysis” (CMA) is defined as “the analysis of sales of similar recently sold properties in order to derive an indication of the probable sales price of a particular property by a licensed real estate broker.”
A “broker price opinion” (BPO) that is based on recent sales of comparable properties is, therefore, a CMA, and may be performed for a fee only as noted above.
The Real Estate Commission considers the performance by a broker of a BPO for compensation in violation of the Appraiser Act to also constitute a violation of the Real Estate License Law.

 

[Bob Ipock]

Benji,


Show me evidence of any loan made based on a BPO where the loan amount is over $250,000.

$100.00 to your favorite charity.

NC has such a law and it is nearly impossible to prove that the real estate agent performed the BPO without expectation of a listing. There has never been any published violations in NC.

Has ANYONE ever filed a complaint concerning a BPO and actually seen an agent found guilty and disciplined?


http://www.ncrec.state.nc.us/bulletin/bulletin.htm

 

[Greenback]

Benji,


Show me evidence of any loan made based on a BPO where the loan amount is over $250,000.

I can't.

$100.00 to your favorite charity.

the Benji gas money to get to work fund

NC has such a law and it is nearly impossible to prove that the real estate agent performed the BPO without expectation of a listing. There has never been any published violations in NC.

In your own opinion, if you wish to, explain why that may be?

Has ANYONE ever filed a complaint concerning a BPO and actually seen an agent found guilty and disciplined?

If true, what do you think the reason being is?


http://www.ncrec.state.nc.us/bulletin/bulletin.htm

Thank you.

Sincerely,

 

[Bob Ipock]

Very few appraisers would have the guts to file a complaint.

If they did file a complaint they would become a sworn enemy of every real estate agent in there area, snubbed by the NAR, local board and loan officers.


My opinion is this BPO by real estate agents for loans is simply a myth. Nobody can offer any proof that it actually happens.

"It is the economy stupid." Business is not down due to BPO's..business is down because loan applications, home sales, equity lines etc. ............are ALL DOWN.

 

[Greenback]

...Not sure how to post a pdf, here is a copy discussing Pennsylvania rules:

Real Estate Commission FAQ 3/20/2009

Disclaimer: The information on this page is not to be construed as legal advice by the Commission, the Bureau of Professional and Occupational Affairs, the Department of State or the Office of General Counsel. Rather, it is being listed for informational purposes only. For responses to any factual situations, contact your attorney.

APPRAISAL ACTIVITES
What is the correct procedure when a real estate office receives a call from a third party company asking that real estate licensee to perform a broker price opinion (BPO)?

Real estate licensees are not permitted to perform BPOs under their real estate licenses. A BPO is an appraisal and can only be performed by someone who holds an appraisal license—such as an appraiser or a broker/appraiser. That being said, however, sometimes companies ask for a BPO when all they really just desire a comparative market analysis (CMA). Real estate licensees may provide CMAs if the CMA is being performed in order to obtain the listing. Remember, the CMA must have the disclaimer language contained in the RELRA. A discussion about BPOs and CMAs appears on the Commission’s web site at www.dos.state.pa.us/estate under “BPOs v. CMAs” and in an article by Dan Bradley in the most recent newsletter also available on the website.

If you have the time to provide more information through PDF, that would be great.

What I underlined in your post is interesting to me.

Note: I did not change the verbiage in your post.

Sincerely,

 

[Greenback]

From a recent(2009) NCREC bulletin:

Be Wary of Performing “Broker Price Opinions”

The Commission has noted an increasing number of reports of brokers providing, for a fee, a “broker price opinion” (BPO) for a party who is not a client or potential client of the broker.

The downturn in the real estate market has apparently resulted in more demand for informal estimates of the most probable sale/purchase prices for properties that are less expensive than a full appraisal.

Brokers may be requested by lenders, loan servicers, potential investors or others to provide this service for a fee, or brokers may simply be seeking alternative sources of income in a slow market.Brokers should remember that the North Carolina Appraiser Act requires any analysis, opinion or conclusion as to the value of real estate performed for compensation to be performed by a licensed or certified appraiser.

However, the statute does provide a limited exception to this requirement that permits real estate brokers to perform a “comparative market analysis” for compensation ONLY for prospective or actual brokerage clients or for real property involved in an employee relocation program.

The verbiage in that paragraph caught my eye.

A “comparative market analysis” (CMA) is defined as “the analysis of sales of similar recently sold properties in order to derive an indication of the probable sales price of a particular property by a licensed real estate broker.”

And, the definition in this paragraph caught my eye.

A “broker price opinion” (BPO) that is based on recent sales of comparable properties is, therefore, a CMA, and may be performed for a fee only as noted above.

The Real Estate Commission considers the performance by a broker of a BPO for compensation in violation of the Appraiser Act to also constitute a violation of the Real Estate License Law.

Sincerely,

 

[OSU Beavers]

There was that whole Oregon ACLB vs Chicago Title lawsuit 15 years ago, but nothing ever came out of it.

 

[Greenback]

...My opinion is this BPO by real estate agents for loans is simply a myth. Nobody can offer any proof that it actually happens.

You mentioned a BPO over the De Minimis. I said I can't provide proof of that. However, "a little birdy" told me that under the De Minimis level, it does occur.

"It is the economy stupid." Business is not down due to BPO's..business is down because loan applications, home sales, equity lines etc. ............are ALL DOWN.

Right - it is the economy stupid. But, this economy is different and when something fails there are multiple causes, especially with regard to this economy.

The government flat out said for loan mofications, valuations other than Appraisals would be used, but I didn't save that news clipping.

I've been around long enough and I have seen enough to know that BPOs were used before the recession and during the booms. And, BPOs pollute the real estate market.

Sincerely,