Endorsement of BPOs
The US Treasury Department recently recognized BPOs as an important valuation tool in the Home Affordable Modification Program, which could provide loan modifications to 3 to 4 million homeowners nation-wide allowing them to stay in their homes and avoid foreclosure.
In addition, the FDIC has recognized the use of BPOs to establish loan-to-value ratios as part of its Loss Sharing Proposal to Promote Affordable Loan Modifications and the Federal Reserve Board has adopted BPOs as part of its Homeownership Preservation Policy for Residential Mortgage Assets. Further, Title XI of FIRREA as well as the proposed Interagency Appraisal and Evaluation Guidelines both make clear that BPOs are appropriate in a wide range of circumstances.
Legislation was recently passed in Nevada that clearly describes the broad range of situations in which agents or brokers may deliver BPOs (generally, for most purposes other than as the sole basis for a lending decision). A similar outcome was reached in H.R. 1728, the anti-predatory lending bill recently passed by the U.S. House of Representatives.
The long-standing embrace of BPOs by the mortgage industry, which relies on BPOs to make important loan-level decisions having immediate and significant financial impact, likewise speaks to their quality, reliability, efficiency and suitability.