What do you CA guys think about this?


State senator proposes new real estate, mortgage rules
January 4th, 2008 by John Gittelsohn
State Sen. Mike Machado, chairman of the Senate Banking, Finance and Insurance Committee, has introduced three new bills to tighten oversight of mortgage brokers, ban individuals found guilty of violating real estate rules and allow tax breaks for mortgage borrowers who receive relief from their lenders.

Machado, D-Linden, plans to hold a press conference Monday in Sacramento to discuss his plans.

Here’s his summary of the bills:

SB 1053 requires every Department of Real Estate (DRE) licensee who makes, brokers, or services mortgages to notify DRE about those activities on an annual basis. The bill also requires real estate brokers in charge of mortgage brokerage, lending, or servicing businesses to submit detailed compliance reviews of their books and records to DRE annually, along with business activity reports detailing the loans they made during the prior year.

SB 1054 closes two loop-holes in current law. The first provision gives DRE the ability to ban individuals who have been found guilty of violating the Real Estate law from taking a real estate-related job with a company that has a different regulator. The second provision prohibits a real estate professional who gives an opinion of value on a property to a mortgage lender from acting as the listing agent on that property for a period of one year.
SB 1055 provides state income tax relief to borrowers who have had some portion of their mortgage debt forgiven by their lender. The bill allows borrowers whose lender agrees to forgive a portion of their mortgage debt to exclude that forgiven debt from their income for state income tax purposes.

For more information on state legislation, go to http://www.leginfo. ca.gov

*cricket cricket*

there is a loop hole .........

You just need to know where to find it ....

He/She who provides the highest bpo will get the listing, right?

I see it ...hidden in plain sight. They have my vote to not add that provision. I just faxed Arnold Shwartzeneger.

The second provision prohibits a real estate professional who gives an opinion of value on a property to a mortgage lender from acting as the listing agent on that property for a period of one year.

very bad. this would discourage competition and effectively block new brokers and agents from entering the REO markets.

Beauracrats....
The more rules they create, the more problems they create. The more problems they try to solve, the more problematic situations they enable. I wonder if they would add fees to review the compliance reports?

There should be a seperation of state and economics.

Loop hole? Realtors don't need no stinkin' loop holes-they just pretend the rules don't exist. Send the check, NOW!

Nope, there is a loop hole ..........

We are not providing a lender the opinion of value, we providing that to a 3rd party who supplies it to the lender???

Help me out here. What in the world does this have to do with the sub-prime collapse or with the current financial crisis?

This guy's out of it.

It must be election time.

I'm not sure he's thinking about the sub-prime mess. If I had to guess, it's about being an unbiased third party and having no interest, financial or other, in a property you give an opinion of value on. Some think a listing agent, looking for a quick commission, may low ball his own listing in an effort to sell it quickly without regards to what's best for the client.

It could also be the case that he has some cronies who are appraisers.

Gotta be.

And what does "acting as a listing agent" have to do with appraisers? Some people, including this senator, believe brokers/agents should act in the best interest of their clients. In this case he believes some agents under value property in hopes of a quick commission/sale. We all know that never happens.

The push for making BPO's illegal is coming from appraisers. They are trying to organize & get this done in every state that currently allows it.

One, they are hurting for work right now due to the sharp decline in loan originations.

Two, *some* (I'm not saying ALL) are none to happy with the prospect of a disinterested outsider doing what is basically a double check on their work. If there is any cherry picking going on the BPO's should catch it.

Appraisers are absolutely outraged at the whole BPO thing & are looking for any/every angle to stamp them out.

All you need do is read some of the postings on the appraiser's forums to find out what they really want.

Just what part of this proposed bill makes BPOs illegal? Goodness, you should have read the OP before posting. Again here is the proposed legislation:
Nothing about making BPOs illegal.
Post a few links, please.

Actually I have read the legislation. This is a first step toward making BPO's obsolete, the camel's nose under the tent so to speak.

I can't post discussions from other forums. However, anyone who is interested can certainly do a little research & read for themselves what appraisers are trying to do. They are outraged that agents can do BPOs & frankly a bit nervous about the extra scrutiny.


If you are truly interested I'd suggest going to the source & finding out what appraisers are collectively trying to do in your state.

Yes you can, don't cop out now. We just need the links, not the whole discussion. And it should be pretty easy, considering all of the "outrage".

There are message boards for appraisers just as there are for agents. Hint: use the *search* feature. I don't have time to post every thread about why allowing agents to do BPO's must be outlawed.

I'm not really interested in arguing about this. Those agents who rely on BPO work for income hopefully will be able to conect the dots & take action to protect their livlihood. The writing is on the wall, choose to ignore it if you wish.

Think about it... One of the last things you do before you list a property for a bank or management company is.... a Listing BPO! Jeesh, now you just did a BPO and you can't list the home. That makes a ton of sense. A lender would have to have one agent do a BPO and then assign it to another with the price already determined. Don't fix it if it works fools!

Yes it would make sense to leave things as they are but appraisers are pretty desparate right now, this is a hot topic on their boards.

If they're so desperate maybe they ought to think about getting their real estate license and doing BPOs. Or maybe do what a lot of agents who can't find enough work are doing and look for another line of work.

If they're so desperate maybe someone could post a few links.

So hot you've yet to post any cites.

DesertRose, you're a newbie and your first post is some bull with no cites. It's not my place to go searching for links to back up what YOU said. When someone spouts inflamatory nonsense with no proof that's called trolling.

Actually I am not a newbie, just had to change ID's due to computer melt down.

I don't care if you search for links or not. But agents who rely on BPO income may want to be proactive & see what our opposition is up to.

Are you an appraiser perchance?

What can we do to be proactive? Should we contact our board and state reps?

I have contacted my state senator about the proposed CA legislation. Yes, definitely our state org is another place to start.

Here is just one thread of many:

http://appraisersforum.com/showthread.php?t=131422&highlight=bpos

Any legislation that is proposing restrictions and endorsing activity which will be more cumbersome to the business individual (in this case agents and brokers) is going to inhibit economic productivity. That alone should cause reason for concern.

This isn't even about BPOs here, though I'm sure we could look at it justifiably through that narrow looking glass. This is just another example of the restriction of economic production and freedom being gradually taken away. That alone is a threat. There are people who would rather use legislation than their own productive talents to compete because there is no other way for them to keep up.

In reference to the appraisers trying to make BPOs illegal, I want to give an alternative perspective to this. The names elude me at the moment, I will look them up later but I recall reading about an event a century ago in which a major player in coal production unjustifiably raised wages and prices because he thought he could extort money from his consumers. Coal, of course, one would think would be a limited resource. His consumers simply switched over to petroleum and oil to fuel their production.

If appraisers wish to make BPOs illegal there will be another alternative. Their only defense against the competition of BPOs is to shape up their act. Agents face the same issues against the banks wanting to get involved in direct selling of real estate. Legislation won't solve the problem. Licenses and CEUs and all of that wonderful money spent to prevent incompetency hasn't stopped it one bit. It's certainly made the government bigger and given them more money but the problem still remains......

If you go to the link I posted above, notice the letter to CC . . .

Hummm, I do recall during the last round of fc's & inflated appraisals all those new USPAP regs were going to fix it . . .

Yeah, right.

Again agents they want to stop you from doing BPO's:

http://appraisersforum.com/showthread.php?t=132335

When I try that link I get the main page and a notice that I am not authorized to access any forums.

Ooops, perhaps you have to register to have access. There are a *lot* of threads ranting about how they can get BPO's outlawed.

I did go ahead and register and have been reading some of those threads...also some other ones that give some insight into the appraisers' world...heck, they are just trying to make a living, like us, and, like us, they need to 'tweak' their product and polish their skills to survive.

Yes that is what they *should* do but it seems they prefer to rant, rave & organize to pressure their state legislatures to put BPO agents out of business.

Did you notice the hatefulness & complete lack of understanding of how the RE business even works?

Appraisers are doing BPO's. I know several appraisers that I work with that have lowered themselves and are now doing the lowly work of BPO's for BPO fees. Sure they would love to do a full appraisal for $300.. but $50 is better then $0.

A good question to ask is... what would NAR do if Aprraisers started selling houses? Everyone is looking out for their own self. Just read the posts on this board when someome wants "inside".

I wish appraisers *would* be required to sell RE for a few yrs. Might give them some grasp over how the industry works.

I am surprised agents are not more concerned about these efforts to outlaw part of their livlihood.

Could wake up one day soon & find BPO's are illegal in your state.

You only managed to find two and at best they passivey touch on any of your points. Hardly "a *lot*" of threads.
Great. And what you and anyone else who registers will see is that DesertRose, at best, has over stated her position.
Again, you’ve not provided one example of legislation pushed by appraisers that would out law BPOs.
Hatefulness? Complete lack of understanding? Oh goodness. Well here’s an example of hatefulness and lack of understanding; A noob Realtor asks for assistance choosing comps-
http://appraisersforum.com/showthread.php?t=131723
You’ll notice appraisers are so angry, they rant, rave, organize and are so busy pushing state legislatures to make BPOs illegal, that they take time and advise a noob on how to choose comparable’s. You’ll also notice not one person told her it should be illegal. Forgot about this thread DesertDiva, um I’m sorry DesertRose?
I’m not for two reasons: 1) There is no effort. 2) Most brokers/agents perform BPOs hoping to get listings which no one has ever challenged as anything less than legit.
Pure hyperbole.

DesertRose/Diva, you’ve trolled long enough. You posted two threads after claiming an industry wide effort among appraisers to make BPOs illegal. Funny thing is the first link is a thread lambasting http://www.bpowealthsystems.com a website that has been lambasted on this board and the other thread has to do with Clear Capitals misleading advertising. That out of literally 10,000+ threads and on a board which has at peak times everyday several hundred members logged in. As a comparison 89 members/guests were logged in to this board at the time of this post compared to 246 logged in at the Appraisersforum. All you’ve proved is that you’re a troll. And not for one second do I believe your computer crashed so you had to change user names. All you had to do was request a new password via e-mail.

So Target RE are you an appraiser or not?

I could not care less what you think/believe. But I do think this issue is important enough to share with other agents.

The facts are what they are & folks will do with them as they see fit.

Sure seems to strike a nerve with you, tho. Would you like to share the reason for that?


Desert Rose (formerly known as Loan Diva prior to computer crash)

Let us define the differences between BPO's to Appraisals.

Agents, which should be brokers, are not held to ANY rules or regulations when reporting the data. I have seen the ol' thread "How do you guesstimate the home's square footage?". Real professional there folks. You are not estimating values for Webkins, you need solid, proveable data.

BPO's are not designed to be used for lending purposes. They are designed to give a potential client (homeowner) an idea of what price the home will bring in the local market.

I am a RE agent/associate broker, member of NAR and an appraiser. I have sold several REO's, completed BPO's, turned down potential listings because the bank has some false dream by telling me what to list a home at twice the true market price. If state law says one cannot do BPO's for a fee, then that is law. If you want to make money by doing property valuations, go become an appraiser. If you were my employee making me 50% of $50, I would tell you to go to the mall and hand out business cards instead of wasting your time on something you shouldn't be doing in the first place UNLESS it was for a potential listing. I don't want to hear "I will get this REO", yep, one out of 100. Time to get back to work and make the office some REAL money and not messing with my E&O on something my state says you cannot do.