I know this has been an ongoing issue. When I show them that comp.s for a particular property are say 6 short sales/REO's and only 1 or 2 equity sales, the response is simply "we don't care, our policy is non short sales/REO's only". They don't care that the property has been on the market for months, below the BPO price, with no offers within 20% of the BPO. Any success?
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I fight them all the time. It's called a BPO value dispute. And yes, I'm getting sick of doing this...but it has to be done, otherwise all the servicers will just take the overpriced BPO's that a ignorant or lazy agent will accept.
It's about the principle. Somer servicers have even gotten caught telling BPO agnents to come in with higher values on their BPO's when they submitted them 1st time around or risk not gettting paid. It's horrible.
Make sure you do a value dispute, show your comps, and yes distressed IS a part of the truth, for the propery in question IS a distressed property..duh.
And show the repairs needed in your general contractors invoices etc....a house needing repairs and in as is condition cannot be comparable to home down the street that was completely fixed up and turn key condition..
Also, send in the appraisal as a last resort and bump it up always to escalations or executive resolutions dept...once this is done,,, the file is overseen by the OCC and Treasury dept... at lower levels it isn't .
Sheyenne - How do we get it to the executive resolutions dept? Does every lender have a executive resolutions dept? Or does it only apply to certain loan types?
Thanks. :)
EVERY SERVICER or lender has an "EXECUTIVE RESOLUTIONS DEPT....some just call it a different name. If you are doing a CITI short sale...This is what THEY call it when you bump it up to upper management to be overlooked, etc... B of A usually just calls it escalations dept...or getting into escalations... etc...
Every servicer has these folks...you can even google it... or call that short sale dept and or lender and find out what is their upper management dept called for dispute resolutions...just know how to ask.
You can usually google this info and get the numbers also, or from the short sale /loss mitigation departments or call the general numbers for that servicer. Someone will tell u. It's the lender's job to come in high...they know that there are tons of desperate agents out there that will accept that price to hurry and get into escrow instead of showing them that the price the bank wants is way out of whack and will only result in a buyer walking instead of closing... It's like playing poker...Learn how to counter back...if it is justified and prove your point.
We have a home under contract as a short sale with Citimortgage. The BPO came in 300,000 over the offer or value in the area. The company that hired broker to complete the BPO used a broker from out of the area, and forced him to use comps within a mile in this rural area. The only comps were not comparable and skewed the whole appraisal. We did send the actual comps and they would not look at them thorughly.
Citi says the value is over what the Short sale is and will not approve this, even though we provided comps to show the actual value. The sellers are elder and wife has passed away 2 months ago.
If the banks takes this back in the near future it will be sold most likely for lower than our current contract.
Does anyone have a contact for some who can help appeal this... Please let me know.
As an appraiser, I am required to use comps that reflect the truth of the current market. Truth is, REOs & Short Sales still make up the bulk of sales in most markets. That is the truth. Lenders appear to be looking to make a LIE supportable by skewing comps to std sales only, and the fact that the subject property is not a std sale makes their demands even more deceitful. So they want to wring out every cent, and screw the buyer. When the new lender's appraisal comes in under BPO, who's in the wringer? Buyer, Agent, new lender, and of course it will all be blamed on that darned appraiser with the current too-low FMV. Let the chips fall where they may. Report the sales, std, reo & SS. Make value conclusion based on the facts & condition. Quit lying...just kicks the pain down to the next guy.
I encountered this before and failed in a dispute b/c they wouldn't consider distressed properties (other short sales or REOs) even if they were in move-in condition. As such I make a point when listing to not use any in comps and life got better. Unfortuantely, buyer's agents will use them (especially if right next door and in move-in condition). No sense getting an offer you can not get approved though...
Order and pay for your own appraisal (so long as you think it will support your value); this has worked for me about 10 times.
Makes no sense to compare a distressed property to one that is not. They are not comparing apples to apples.
Interesting...I've been told by Freddie Mac a few times, when we've disputed comps, that distressed comps are not allowed. Didn't make any sense to me as they are obviously not getting an apple-to-apple comparison. I've talked to some BPO agents that have to use at least 1 equity sale and some have said that the lender doesn't want any distressed sales and then some that say they can use all distressed sales. I've heard so many stories from so many different sides. Gets a little confusing and frustrating since the BPO can make or break a short sale property! I know I'm not helping, just thinking out loud here! And of course, I don't do BPO's, so I have no clue what the different lenders/investors require or ask for. That's my .02! Sometimes, a good old fashioned letter, stating in great detail what is going on seems to help when I send them in to state my case on a skewed value, along with the comps, etc....
Jeff, good info to know though, about the BPO agent! Thanks!
What lender is that? They won't allow a short sale to be used as a comp FOR a short sale?
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