BPO


The BPO Rider in Nevada was created per the July 1, 2009 new law as discussed in my June 19, 2009 Legal Update

Prudential, Americana Group, REALTORS® created a rider to meet the July 1, 2009 deadline, but the form has now been modified/adopted by the Greater Las Vegas Association of REALTORS®.  The new BPO Rider is now on Ameriforms

Here is an example of how to fill out the new GLVAR form.

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FORECLOSURE

NEVADA PERSONAL RESIDENCES

AS OF JULY 1, 2009

 

A follow up to the April 27, 2007 Foreclosure / Deficiency blog.

IMPORTANT FORMS

CREATING THE PROGRAM

Assembly Bill 149 was passed by the Nevada Legislature during the 2009 session and signed by Governor Jim Gibbons.  Its purpose is to address the foreclosure crisis head-on and to help keep Nevada families in their homes.

This law establishes a Foreclosure Mediation Program for owner-occupied residential properties that are subject to foreclosure notices – formally known as a Notice of Default and Election to Sell – filed on or after July 1, 2009.

WHAT IS MEDIATION?

Mediation is an alternative method to help parties resolve disputes by agreement with the help of trained mediators.  Mediating a foreclosure action has its advantages.  It is fast, inexpensive, and offers a flexibility that more formal processes do not.  Home foreclosures impact both the homeowner and the lender.  Homeowners do not want to lose their homes and mortgage lenders do not want to be in the real estate business.  Both sides may benefit through foreclosure mediations.

WHO IS ELIGIBLE?

The home must be your personal residence, be located in Nevada and you must occupy the property.  Timeshares are not covered, converted mobile homes are.

WHAT IF I AM TRYING TO SELL MY HOME IN A SHORT SALE?

The rules address this and require the Lender to bring to mediation an estimate of “short sale” value of the residence that it may be willing to consider as a part of the negotiation if loan modification is not agreed upon.  So it may be a good idea to participate to assist your Short Sale along.

WHY SHOULD YOU MEDIATE?

You can play a major role, with the help of a trained mediator, in deciding the outcome of your individual dilemma.  Mediation is a give-and-take process in which the parties work to reach a mutually acceptable resolution to a mutual problem.  Resolutions reached through foreclosure mediations are compromises that offer advantages to lenders as well as homeowners.

If you have the ability to meet the other party half way, everyone may benefit.

  • Can you, as a homeowner, make your mortgage payments if your home loan is modified?
  • Can you, as a lender in today’s real estate market, modify a loan to the extent that the homeowner can perform?

If the answers are YES, the Foreclosure Mediation Program may be able to save A Nevada home.

WHAT ARE MY DEADLINES?

The owner of the property (title holder) must, not later than 30 days after the service upon him or her of the notice of default deliver the Election/Waiver of Mediation Form and deliver the form the trustee, by certified mail, return receipt requested & you must mail a copy of the Election/Waiver of Mediation to the Administrator.

WHAT IF MY NOTICE OF DEFAULT WAS SERVICE PRIOR TO JULY 1 209?

You may only participate if the Lender agrees in writing, and you must provide the Administrator a copy of the agreement.  Example agreement located HERE. [attach].

WHAT DO YOU BRING TO MEDIATION?

Homeowners must bring:

  1. A Financial Statement and Housing Affordability Worksheet to include the information set forth in forms provided by the Administrator. (Form does not exist yet).
  2. Confidential nonbinding proposal for resolving the foreclosure.
  3. Perhaps You Should Bring?
    • Your own CMA, comparative price analysis, or a BPO , broker price opinion, from your Prudential, Americana Group, REALTOR® to indicate the current value of the home.
    • Proof you are involved in a short sale listing, if you are.

Lenders must bring:

  1. The original or certified copy of the deed of trust, the mortgage note, and each assignment of the deed of trust and the mortgage note.
  2. Most current and appropriate appraisals that it has.
  3. An estimate of “short sale” value of the residence that it may be willing to consider as a part of the negotiation if loan modification is not agreed upon.
  4. Confidential nonbinding proposal for resolving the foreclosure, including the evaluative methodology use in determining the eligibility or non-eligibility of loan modification.

Both parties can bring lawyers, friends, interpreters, relatives, to support you at the mediation.

WHAT ARE THE COSTS?

$200 for each ‘side.’  If you are married and own the home with your wife, it is still only $200 for your side.  Each party must pay $200 by certified check at the time the election to mediate is mailed in.

A lawyer is not required to be present with you in the mediation process, but each side is welcome to have an attorney represent them.  If you want an interpreter, you must pay for this on your own.

WHAT ARE TIME FRAMES:

Mediations are limited to four hours and require that mediations be conducted within 90 days of a foreclosure notice being filed.  Also all decision makers must be present for the mediations.  That means, if an agreement is reached, it can be finalized quickly.

AT THE CONCLUSION OF THE MEDIATION …

Within 10 days of the mediation, the mediator will prepare the necessary Statement of Agreement or Non-agreement and serve it on the parties.  The original will be filed with the Foreclosure Mediation Program Administrator and the mediation will be closed.  If there is an agreement, the parties will execute the appropriate documents.  If there is no agreement, the parties will be free to pursue other legal remedies.

This is a follow up to my January 2, 2009 An Update on BPOs in Nevada and the October 26, 2007 Broker Price Opinions (BPOs) in Nevada.

**Effective July 1, 2009**

BPO – A BPO is defined as a, “written analysis, opinion or conclusion that a real estate license prepares for a person relating to the estimated price for a specified parcel of real property.”

Real Estate Licensees  In Nevada Are Allowed to Perform BPOs.

A real estate agent may, “prepare and provide a broker’s price opinion and charge and collect a fee” for this service.

BPO Files

BPOs (even those submitted electronically) must be stored for five (5) years.

Broker Responsibility.

The broker is responsible for all activities of a licensee who is associated with the broker and with the preparation of a BPO.

A BPO can be prepared for a:

1.         An existing or potential seller for the purposes of listing and selling a parcel of real property;

2.         An existing or potential buyer of a parcel of real property;

3.         A third party making decisions or performing due diligence related to the potential listing, offering, sale, exchange, option, lease or acquisition price of a parcel of real property; or

4.         An existing or potential lienholder, except that a broker’s price opinion prepared for an existing or potential lienholder may not be used in lieu of an appraisal for the purpose of determining whether to approve a mortgage loan.

A BPO must include:

1.         A statement of the intended purpose of the broker’s price opinion;

2.         A brief description of the real property and the interest in the real property for which the broker’s price opinion is being prepared;

3.         The basis used to determine the broker’s price opinion, including, without limitation, any applicable market data and the computation of capitalization;

4.         Any assumptions or limiting conditions used to determine the broker’s price opinion;

5.         The date of issuance of the broker’s price opinion;

6.         A disclosure of any existing or contemplated interest of every licensee who prepares or provides the broker’s price opinion, including, without limitation, the possibility of a licensee representing the seller or purchaser;

7.         The license number, name and signature of every licensee who prepares or provides the broker’s price opinion;

8.         If a licensee who prepares or provides the broker’s price opinion is a real estate salesman or a real estate broker-salesman, the name of the real estate broker with whom the licensee is associated; and

9.         In at least 14-point bold type, the following disclaimer: Notwithstanding any preprinted language to the contrary, this opinion is not an appraisal of the market value of the property.  If an appraisal is desired, the services of a licensed or certified appraiser must be obtained.

BPO submitted electronically or on bank forms.

If a broker’s price opinion is submitted electronically or on a form supplied by the requesting party:
1.         A signature required by #7 above may be an electronic signature, as defined by NRS 719.100.

2.         The disclaimer required in #9 above may be transmitted in a separate attachment if the electronic format or form supplied by the requesting party does not allow additional comments to be written by the licensee. The electronic format or the form supplied by the requesting party must:

a.         Reference the existence of a separate attachment; and

b.         Include a statement that the broker’s price opinion is not complete without the attachment.

The attached BPO Rider Form has been created to incorporate all requirements from the new law (as of July 1, 2009).  Questions on filling it out? Here is an example filled out BPO Rider Form.  This would be uploaded as a separate attachment if sent electronically and simply forwarded with the BPO if sent in hard copy to render the BPO complete in Nevada.

NOTE:  The NRED has information bulliten #14 which discussed this, but it now removed from the site.

BPO rules changed as of July 1, 2009.  Look for an update soon.

 

samwilsonThis is a follow up to my October 26, 2007 blog on Broker Price Opinions TGIF Legal Tip: Broker Price Opinions (BPOs) in Nevada

Are you performing Broker Price Opinions?  BPO’s remain legal to be performed by real estate licensees in Nevada.  However, as of December 22, 2008 the Nevada Real Estate Division (“NRED”) has opined in “Informational Bulletin #14 BROKER PRICE OPINIONS (BPOs)” that certain clarified requirements apply.  NRED declares:  

  • BPO’s are not appraisals.
  • Real estate licensees may complete BPOs for buyers and sellers of real property for the purposes of listings, sales, exchanges, options, purchases, rents or leases, but never for lending or appraisal purposes. The standards of practice and rules found in NRS 645 and NAC 645 apply to BPOs.
  • The BPO should include the following requirements:

(a) A statement of the intended purpose of the price opinion;

(b) A brief description of the subject property and property interest to be priced;

(c) The basis of reasoning used to reach the conclusion of the price, including the applicable market data and/or capitalization computation;

(d) Any assumptions or limiting conditions;

(e) A disclosure of any existing or contemplated interest of the licensee(s) issuing the opinion including the possibility of representing the seller or purchaser;

(f) The license number, name and signature of the licensee(s) and, if the licensee is a salesperson or broker salesperson, the name of the licensee’s broker issuing the price opinion and the date of its issuance.

(g) The following disclaimer in 14 point, boldface type:

“Notwithstanding any preprinted verbiage to the contrary, this opinion is not an appraisal of the market value of the property. It is intended only for the benefit of the requesting party for the purpose of assisting the requesting party in deciding the listing, offering, sale, exchange, option, lease or acquisition price of the real property and not for any other purpose, including, but not limited to, obtaining financing. If an appraisal is desired, the services of a licensed or certified appraiser must be obtained.”

 Can an agent perform a BPO?  I explained that a BPO is a “Broker Price Opinion,” not to be confused with Business Process Outsourcing.  A Nevada real estate licensee is in fact allowed to perform this function and for a fee, but with some parameters. 

First, it needs to be an opinion and can only be for the purpose of assisting a seller in determining a listing price.  Which means . . . it is not meant to take the place of an appraisal.  NRS 645C.150  (the appraisal statute) declares that only appraisers may perform appraisals, but if you have a Nevada real estate license under NRS 645 you are exempt from the appraisal statute so long as you are performing the BPO within the scope of your real estate license, namely to aid a seller in determining a list price.   The Nevada Real Estate Division has just recently published a clear explanation on the BPOs do’s and don’ts.  [http://www.red.state.nv.us/publications/bulletins/bpo.pdf

Here is the most recent  BPO Clarification from NVAR.

Janet’s always got such good questions.

 Oh . . . and happy Nevada Day!!