Representatives of the Coalition of Appraisers in Nevada spoke against proposed changes to Nevada’s Foreclosure Mediation Program during a March 16 hearing in Carson City. The changes, which the state’s Supreme Court released Feb. 25, would allow a beneficiary of a deed of trust to submit a broker price opinion instead of an appraisal.
Rule 7 of the existing rules, “Documents to Be Submitted for the Mediation,” states, “The beneficiary of a deed of trust or its representative shall produce an appraisal done no more than 60 days before the commencement date of the mediation with respect to the real property that is the subject of the notice of default and shall prepare an estimate of the ‘short sale’ value of the residence that it may be willing to consider as part of the negotiation if a loan modification is not agreed upon.”
The proposed amendments would add language that states, “The mediator may accept a broker’s price opinion (BPO) letter” as long as the BPO complies with Nevada’s new regulations applicable to the production of BPOs.
In a March 12 letter to Supreme Court Chief Justice Ron Parraguirre, the Appraisal Institute said, “We strongly believe that allowing for the use of BPOs in the property valuation component in mediation will not adequately protect the public interest (consumer, borrowers, and others) or the interests of the various parties to the loan.”
The Appraisal Institute was joined by the American Society of Appraisers, American Society of Farm Managers and Rural Appraisers, and National Association of Independent Fee Appraisers in sending the letter,
“Understanding the market value of the underlying collateral is an essential element to any successful mediation program, as it empowers all parties with a basic understanding of the position of the collateral in question,” the groups wrote. They urged the court to retain Rule 7 as written,
To view a copy of the proposed rules, visit www.nevadajudiciary.us/index.php/foreclosuremediation/681-public-hearing-set-on-rule-changes-for-foreclosure-mediation-program .
To view a copy of the AI-ASA-ASFMRA-NAIFA letter, visit www.appraisalinstitute.org/newsadvocacy/downloads/ltrs_tstmny/2010/AI-ASA-ASFMRA-NAIFALettertoNevadaSupremeCourtonForeclosureMediationProgram.pdf.