States who prohibit BPOs as alternatives for Appraisals

[Kathleen O. Farrelly]

BPOs

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.

USPAP,
It isn't a myth. When my sister-in-law was attempting to refinance she asked me if I knew the appraiser who came to her home. When she told me the persons name, I recognized her as a local associate broker, although I was unaware that she was an appraiser. Curiosity caused me to check the PA DOS web site where I discovered that the broker was not a certified appraiser.

The lender declined the loan and would not provide my sister-in-law a copy of the appraisal although she did pay for the report.

 

[Greenback]

...USPAP,
It isn't a myth.

It's definitely not a myth where I'm at.

Sincerely,

 

[Bob Ipock]

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

Show me the evidence. If you can prove that a BPO has been used to fund a loan under FIRREA regulations.........I will pay $100.00 to your favorite (and legitimate) charity.

Note, there are exceptions to the general FIRREA regulations (which were posted last night). READ the EXCEPTIONS.

Show me evidence of any loan that has been made where the law or regulation REQUIRES an appraisal.

Just because we may BPOs are bad, does not mean they are illegal.

Where is the proof and why have you not filed complaints to the appropriate regulators?

 

[Bob Ipock]

a) Appraisals required. An appraisal performed by a state certified or licensed appraiser is required for all real estate-related financial transactions except those in which:

(1) The transaction value is $250,000 or less;

(2) A lien on real estate has been taken as collateral in an abundance of caution;

(3) The transaction is not secured by real estate;

(4) A lien on real estate has been taken for purposes other than the real estate's value;

(5) The transaction is a business loan that:

(i) Has a transaction value of $1 million or less; and

(ii) Is not dependent on the sale of, or rental income derived from, real estate as the primary source of repayment;

(6) A lease of real estate is entered into, unless the lease is the economic equivalent of a purchase or sale of the leased real estate;

(7) The transaction involves an existing extension of credit at the lending institution, provided that:

(i) There has been no obvious and material change in market conditions or physical aspects of the property that threatens the adequacy of the institution's real estate collateral protection after the transaction, even with the advancement of new monies; or

(ii) There is no advancement of new monies, other than funds necessary to cover reasonable closing costs;

(8) The transaction involves the purchase, sale, investment in, exchange of, or extension of credit secured by, a loan or interest in a loan, pooled loans, or interests in real property, including mortgaged-backed securities, and each loan or interest in a loan, pooled loan, or real property interest met FDIC regulatory requirements for appraisals at the time of origination;

(9) The transaction is wholly or partially insured or guaranteed by a United States government agency or United States government sponsored agency;

(10) The transaction either:
(i) Qualifies for sale to a United States government agency or United States government sponsored agency; or

(ii) Involves a residential real estate transaction in which the appraisal conforms to the Federal National Mortgage Association or Federal Home Loan Mortgage Corporation appraisal standards applicable to that category of real estate;

(11) The regulated institution is acting in a fiduciary capacity and is not required to obtain an appraisal under other law; or

(12) The FDIC determines that the services of an appraiser are not necessary in order to protect federal financial and public policy interests in real estate-related financial transactions or to protect the safety and soundness of the institution.

(b) Evaluations required. For a transaction that does not require the services of a state certified or licensed appraiser under paragraph (a)(1), (a)(5) or (a)(7) of this section, the institution shall obtain an appropriate evaluation of real property collateral that is consistent with safe and sound banking practices.

 

[Mary Tiernan]

OK - but in Michigan, BPO/market analysis is not allowed for lending transactions. . . .

 

[Bob Ipock]

Mary,

If you have such evidence (and I assume you do) are you doing anything about it? Have you filed complaints? Will you file complaints?

 

[Greenback]

...(12) The FDIC determines that the services of an appraiser are not necessary in order to protect federal financial and public policy interests in real estate-related financial transactions or to protect the safety and soundness of the institution.

(b) Evaluations required. For a transaction that does not require the services of a state certified or licensed appraiser under paragraph (a)(1), (a)(5) or (a)(7) of this section, the institution shall obtain an appropriate evaluation of real property collateral that is consistent with safe and sound banking practices.

This part is very striking to me.

Sincerely,

 

[Greenback]

...(9) The transaction is wholly or partially insured or guaranteed by a United States government agency or United States government sponsored agency;

(10) The transaction either:
(i) Qualifies for sale to a United States government agency or United States government sponsored agency; or

(ii) Involves a residential real estate transaction in which the appraisal conforms to the Federal National Mortgage Association or Federal Home Loan Mortgage Corporation appraisal standards applicable to that category of real estate;

As of today, Fannie Mae and Freddie Mac has only recieved bailout money, and hasn't been taken over by the United States Government.

Partially? Well, maybe, buried in paper work that is beyond even a Lawyers comprehension.

Sincerely,

 

[Mary Tiernan]

See my post # 16.

I have taken action where I can - and am pursuing an assessor who has evidence.

 

[Greenback]

Ms. Tiernan,

What do you see as the weakness in your state's law?



Mr. Rex and USPAP,

what do you see as the weakness in your state's law?



Sincerely,