Who is doing BPO's for the brokers????

[Dale Smalley]

The guy cleaning the house probally spent more time there than the Realtor and Appraiser. I bet he did not describe the condition as AVERAGE. :lol:
For those who care BPOs are big business and growing every day. The big lenders order them by the thousands. Cry if you want to. They are not illegal. You can't put a Realtor in jail for giving an opinion. Can you imagine that. Or better yet are you going to put the house cleaner in jail for giving an opinion.

Appraisers can not do a BPO because they are not USPAP compliant. Thats it. and why would you want to anyway the pay is really bad.

 

[Red Blumenstock]

Pamela,

Bravo! I'm with you all the way. Yhanks for being so active. I too am active and will report any illegal activity I come in contact with.

Leart3,

I disagree wholeheartedly with your statement. I am still very active in PA and I can tell you that the Board takes action on every complaint they get. There is a cadre of expert witnesses under contract to the State Business, Professional and Occupational Affairs Prosecution, and if a complaint is received, it is referred to them. If they find that no violation has occurred, they are urged to say so. If one has occurred, the prosecution takes action in every case and the Board generally approves the consent orders that are negotiated. Sometimes, the Board doesn't approve if they think the penalty is not severe enough.

Also in PA, it is against the law (Law not rules) for anyone other than a certified Appraiser to do an appraisal and the definition of appraisal there includes nature, quality, value or utility of a property. That includes a BPO. It is illegal in PA.

Have you attended any State Board meetings? If not, why not try it? I attended my first one in Florida last month at Pamela's urging and found that the Board does indeed follow up. There were a number of penalties confirmed at that meeting. So, that makes two Boards that are doing their best to promote professionalism. I know that one of the Florida Board members monitors this forum and I say to him, Thanks Frank. I know that Pamela would agree with me that you are doing a great job for darned little pay and less recognition.

Red Blumenstock

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[Leon Stewart]

Red:

There is an indication that BPO's are illegal in many places, but since they are in such universal use, they can be illegal in most places. But as i indicated in my original post, if they crack down on BPO's the Lenders will continue to process those reports, since there is no indication that they are illegal anywhere, and that is what will eliminate the Residential Appraisal Profession.

Pam:

As long as I can remember, the Appraiser has been filing complaints about activities in the Appraisal Profession, but as they have been filing these complaints, the integerity of the Profession has steadily declined.

It's my belief that the reason for the decline is two fold, one, the weakness in the Appraisal Organizations, and two, the lack of their ability to put emphasis on the core of the problem. All of the Appraisers problems originate from the Lender's control of the Appraisal Process, and the way to approach this problem is through political activity, and electing people to office that will fight for these changes.

Appointments to these Boards and Commissions are made by elected officials. These appointed individuals are just caretakers of a particular political ideology, so you have to have your grievance presented in a political forum. This problem is not about a "BPO", it's about a whole system that allows Lenders the Control of a process they shouldn't even be involved in, since they have a definite conflict of interest. They require a value on property that they will make a loan on. To say it again, it's a political problem.

leart3

 

[Francois K. Gregoire]

Appointments to these Boards and Commissions are made by elected officials. These appointed individuals are just caretakers of a particular political ideology, so you have to have your grievance presented in a political forum.

leart3

leart3

Everyone is entitled to an opinion, but when you extrapolate your experience from Ohio to the other 55 states (remember I'm from Florida) we are entitled to call broad, unsubstantiated generalizations what they are from our vantage point.

Bull**** (sorry Wayne)

Someday, I must travel to Ohio and learn for myself. You should make the trip to Florida (everyone else from Ohio does) and learn for your self.

Peace and Happy Days

 

[Pamela Crowley (Florida)]

leart3,

As long as you stand by and do nothing... you are part of the problem.

 

[Oregon Doug]

TE - The guy that you met likely worked for the M & M contractor in your area. These are the guys that clean and secure new REO's but I've never heard of one of them appraising the house - wasn't that why you were there. I wonder if he wasn't calculating the costs required to bring the home into marketable condition.

As far as BPO's - different states have different rules/laws and regulations. Many states (OR, ID) are "manditory" - meaning that only licensed/certified appraisers may do appraisals (with certain exceptions). Some states (CA) are "volintary" and I'm not really shure what that means. Here in Oregon, BPO's are allowed (exception) for the express purpose of obtaining a listing only although I hear say that they are being used for other purposes also. It has been brought to my attention that one of our local banks is using them to value properties in their Trust Department and nonperforming assets. Although this may be a violation, until some one submits one/some to our Appraiser Certification & Licensure Bord (ACLB), nothing can be done!

As an appraiser member of the ACLB, I can tell you that this is a significant issue and we are well aware of it - along with a lot of other issues too. Pam is right, do something, get involved......

I've pleaded with local appraisers to just attend the board meetings and find out what's really going on. I've even offered to pick them up and drive them to the meetings! NO ONE ATTENDS OUR BOARD MEETINGS! I hear that they are "to busy". Hey, I'm a busy guy too but I believe that it's a part of my responsability to put forth a little time and effort toward enhancing my profession. I'll do what I can but I need all the help I can get.

Oregon Doug

 

[bradellis]

Leart, Pam, and Red,

BPOs are used for a variety of reasons. They are legal in all but about 5-6 states. Even where they are "illegal", most states allow them for purposes of obtaining a listing. PA has the most interesting law as it has a class of folks called broker/appraisers who need training and must be so licensed.

Appraisers can do BPOs, except they are called appraisals and require extraordinary assumptions, are typically restricted reports, and require USPAP compliance.

Rumors of their use in funding loans are way overblown. The usual reasons for using BPOs ar for foreclosure purposes or portfolio acquisition. The lenders understand these are not anywhere as accurate as appraisals.

In foreclosures, the client is giving the listing to the broker who has to go out, secure the property, and do lots of other things (arrange clean ups, repairs sometimes, etc). Basically, they get the BPO for free in exchange for the listing, but there is a good part:

Virtually every property undergoing foreclosure will get one or two appraisals. Most courts do NOT like BPOs. One of our clients, after they get the BPO, orders a drive by for pre-foreclosure and then orders a full appraisal from the same appraiser after they get possession so they can get the appraiser inside. Yes, the new value is often very diffferent once the apprasier gets to see what is truly going on.

About the only problem is when your appraisal differs widely from the BPO. In these circumstances, clients typically accord much more weight to the appraisal, but occasionally they will question the data. In those rare situations where the BPO had sales that the apprasier did not use, you may be asked to analyze the sales used by the broker.

Now and then the broker gets it right when the appraiser does not- but that is because the appraiser was either lazy or dumb (yes- they are out there). Usually, it is the broker's opinion that is called into question.

REOs are fun!

Brad Ellis, IFA, RAA

 

[Leon Stewart]

Frank:

As you indicated, I'm commenting in general terms, I don't know nothing about your activities or the state of florida, thank god.


Pam:

If that be the case, conversely, one who goes in an unproductive direction is the same as those who don't participate at all since neither get anything done. Based on your statement, I guess you would have to agree with that. It's my understanding that unproductivity is unproductivity no matter how it takes place. In many cases productivity is the results of a well organized plan of action, not just a lot of yap yap and storming the hearing chambers or vote recount room.

leart3

 

[Leon Stewart]

Brad:

A few months ago one of those Pa REO Firms went to the Short Form Reports that they designed themselves. I decided to pass on that work, but I guess these individuals can set up their own procedure and format as they see fit, but how the Appraiser fits into this puzzle is what's in question. But since they are BPO's I guess in general they don't have to be approved by anyone but the REO Firm, but what about regular lenders using these BPO's? well I guess the same thing applies to AVM's also.

leart3

 

[Anonymous]

TE,

In good, ole Oregon, we had a title company who liked to do
mortgage appraisals real cheap by having the title people
look up a few deeds and say the property is worth
$125,000 and since we had this nice new
spankin appraisal law we pointed it out to the ACLB.
Well money talks. So the ACLB himmed and
hawed, and finally said, well it was OK.

We went WHAT!!!????

So they figured they better codify it....so if you look
at Oregon statutes it essentially says if your anybody
who works for anybody (you fill in the blank, realtor,
title company, government, surveyor, forester)...
then you can express your opinion of market value and
your exempt from the all the c*r*a*p that those idiot
appraisers subjected themselves by becoming a real
appraiser. Its a total status quo, head in sand law.

But that's how we do things out west. Your tax
money at work.

elliott