Industry NewsMortgage

New BPO rules won’t kill demand

Broker price opinions will still be needed for pricing REOs, short sales
Published on Jul 20, 2010

New restrictions on lenders' use of broker price opinions (BPOs) contained in the financial regulatory reform bill passed by Congress shouldn't affect brokers' BPO workloads.Although lenders will have to obtain full appraisals before greenlighting most purchase loans secured by a principal residence, BPOs will still be in demand for pricing REOs and short sales, and will continue to be valid documentation for refinancings. Before the passage of HR 4173, the Dodd-Frank Wall Street Reform and Consumer Protection Act, federal banking agencies didn't require lenders to obtain a full appraisal for residential mortgage loans less than $250,000, FHA- or VA-insured loans, and residential mortgage loans whose appraisals conform to Fannie Mae or Freddie Mac appraisal standards.HR 4173 will amend the Financial Institutions Reform, Recovery, and Enforcement Act of 1989 (FIRREA) to stipulate that BPOs "may not be used as the primary basis to determine the value" when a consumer is taking ...

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