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FIRREA is the Financial Institutions Reform, Recovery, and Enforcement Act. This act was passed on August 9, 1989 to respond to the Savinggs and Loan Crisis after it bankrupted the Federal Savings and Loan Insurance Corporation. The FSLIC was supposed to make sure Savings and Loan depositors received their investments back when the banks went bankrupt.
FIRREA provided $50 billion to close failed banks and stop further losses. It set up a new government agency called the Resolution Trust Corporation (RTC) to resell Savings and Loan assets, mostly real estate, and use the proceeds to pay back depositors. FIRREA also changed Savings and Loan regulations to help prevent further poor investments and fraud.
Examples: Without FIRREA, depositors in bankrupt Savings and Loans would have simply lost their money.
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What government action occurred due to the savings and loan crisis?
In response to the savings and loan crisis of the 1980s and early 1990s, the U.S. government enacted the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA) in 1989. This legislation aimed to restore stability to the savings and loan industry by providing for the resolution of failed institutions, increasing regulatory oversight, and creating the Resolution Trust Corporation (RTC) to manage and liquidate assets of insolvent savings and loans. The government also implemented stricter capital requirements and improved regulatory frameworks to prevent future crises.
Did Reagan deregulate the bank industry?
NO!!!! Bill Clinton Signed legislation on November 12, 1999 that repealed the Glass-Steagall Act that previously regulated the banks. ========================================================================================= In December 1982, President Ronald Reagan signed the Garn-St. Germain Depository Institutions Act. This Act removed statutory restrictions on real estate lending, and relaxed limits on how much could be lent to any one borrower. In February 1989, President George H.W. Bush signed the Savings & Loan bailout bill, formally the Financial Institutions Reform Recovery and Enforcement Act (FIRREA). This bill also modernized the charters of the two government sponsored entities, Fannie Mae and Freddie Mac, with an eye to making them more effective in spreading home ownership to low and moderate income families. Source: RightwingRhetoric101.com
What is a BPO Broker price opinion?
A "BPO" is an acronym for the phrase, "Broker Price Opinion." For many of you this phrase is a completely new and foreign term. In actuality, it is something that many brokers, agents, appraisers or members of the general public know about.A Broker Price Opinion report is an opinion of value that is conducted by real estate professionals to help determine the estimated current market value of a specific property. A typical BPO form is 2-3 pages, is either an exterior or interior inspection and is seen within the valuation industry as an option to a full appraisal report.Some banks, lending institutions and asset management companies offer options to their customers and clients. Some of the reasons these companies will ask that a Broker Price Opinion be done on a property are: when doing refinance loans, home equity loans and lines of credit, the removal of private mortgage insurance and portfolio acquisitions of performing loans. This option gives everyone choices so they don't have to pay for a full appraisal and instead pay a lesser amount to have a real estate broker, agent; complete a Broker Price Opinion.Also, some BPO's are used to help banks, government-backed mortgage providers and lending institutions determine the "Current Market Value," for a property that they are financing and the mortgagor is defaulting on their monthly mortgage payment that they are contractually bound by. They can use broker price opinions to help with determining if a property should go into pre-foreclosure or foreclosure. Perhaps, they want to check out other less expensive alternatives that are available instead of foreclosing on a property, such as: deed in lieu of foreclosure, bankruptcy, loss mitigation, a forbearance plan, a short sale situation, charging it off, or using a junior lien protection plan.-Provided by and Copyright Protected by Nicole Ocean of BPO University_______________________________________________________________On March 31,2009 Freddie Mac revised its Seller/Servicer Guide to strictly prohibit its lenders from using broker price opinions to value properties for mortgage purchases. Though Freddie had refrained from using BPOs as a matter of policy, the changes made to section 44.7 of its Selling Guide leave no room for loopholes.The revised Selling Guide states that to be acceptable for a transaction, each mortgage file must contain one of the following reports:- A written appraisal report- A written inspection report- A print-out of the Last Feedback Certificate with the Minimum Assessment Feedback of Form 2070 or PIAAlso clearly stated in the revised language of Freddie's Selling Guide is the requirement that the Seller may not use tax-assessed valuations or BPOs to determine value.More recently, on July 22, 2010, President Obama signed into law the Frank-Dodd Wall Street Reform and Consumer Protection Act (HR4173). The bill has significant appraisal reforms which include changes to FIRREA, ASC, the use of BPOs and AVMs. "Broker price opinions may not be used as the primary basis to determine the value of a property for purchase money transactions".Appraisers, under the requirements of their license, are not permitted to complete a BPO as it is not a USPAP compliant method of valuation. Doing so would be a violation of USPAP.
