The US Treasury Department has recognized broker price opinions (BPOs) as an important valuation tool in the Home Affordable Modification Program (HAMP), which aimed to provide loan modifications to 3 to 4 million homeowners nationwide, allowing them to stay in their homes and avoid foreclosure.
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.
The Federal Reserve Board has adopted BPOs as part of its Homeownership Preservation Policy for Residential Mortgage Assets. Further, the Dodd-Frank Act allows for use of BPOs except in cases involving mortgage originations related to the purchase of a principal dwelling.
Legislation recently passed in several states clearly describes the broad range of situations in which agents or brokers may deliver BPOs (generally, for mostpurposes other than as the primary basis for a lending decision).
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.