American Homes 4 Rent, one of the nation’s largest single-family home landlords, has been subpoenaed by the Securities and Exchange Commission regarding brokers price opinions on the value of its properties, according to regulatory filings. The Agoura Hills company uses broker price opinions to determine the values of its assets. Some of those properties it partners on with other companies that contribute capital toward the ownership and operation of those rentals. In its SEC filing dated Sept. 13, American Homes said it received a letter that day from the federal agency that it was investigating securitizations, or debt financing, of certain single-family home rentals. As part of the letter, a subpoena requests American Homes to produce documents and communications that include broker price opinions on properties the company financed with debt. American Homes also cites in the filing that a Philadelphia company which provides American Homes with broker price opinions, Radian Group Inc., parent to Green River Capital, also disclosed in its quarterly report for the period ended March 31 the same letter from the SEC. Radian, mainly through its subsidiaries, including Green River Capital, provides the real estate and mortgage finance industries with services, some of which it outsources, including real estate valuations to buyers and sellers of, and investors in, mortgage- and real estate-related loans and securities, the company said on its website. Under California law, broker price opinions are “opinions of values” on property and are considered an appraisal, and therefore those submitting the opinions have to be licensed appraisers by the state. Other states have their own rules governing broker price opinions. American Homes and Radian said they are cooperating with the SEC. In April 2009, the National Association of Realtors reported that sales associates were generating broker price opinions and selling them to third parties and to lenders. However, the association warned its members that there could be state penalties when those opinions are prepared improperly or mischaracterized. State regulations govern broker price opinions, the association said, on who can prepare them, under what conditions, for whom they can prepare them and how those opinions can be used. American Homes owns 48,000 homes in 22 states and has a market capitalization of $10.7 billion. Shares of American Homes (AMH) closed Wednesday down 15 cents, or less than a percent, to $22 on the New York Stock Exchange.
