Beginning in the latter part of 2012, a number of REALTORS® across the country reported that Fannie Mae had started jeopardizing short sale transactions by requesting purchase offers at significantly higher prices than market values. REALTORS® continue to report that Fannie Mae’s actions have led to a decrease in the number of Fannie Mae short sale transactions, an increase in the number of borrowers going through foreclosure  producing further negative effects on surrounding property values.

Fannie Mae

  • On Nov. 5, 2012, NAR met with Fannie Mae executives to discuss valuation issues related to short sale transactions. Fannie Mae’s short sale team indicated that they made changes to some of their short sale policies in an attempt to copy efficiencies they’ve achieved through their REO broker network.  These changes were intended to implement similar measures for short sale transactions.  Fannie Mae stated they intended to minimize bank involvement and have more direct communication with listing agents in short sale transactions to speed up decisions and processing of short sales.
  • NAR requested that Fannie Mae provide an improved process for real estate agents to request list price reduction when the agent feels the value is out of line with the local market. Additionally, NAR expressed the need for more visibility and transparency into Fannie’s valuation and escalation processes.
  • As a result of these efforts, Fannie Mae contacted NAR on Dec. 19, 2012, acknowledging the persistence of the issue and efforts to improve communication on the process.   NAR contributed input on the development of Fannie Mae’s HomePath short sale site that includes an escalations contact form to resolve some of these issues.  While these efforts are an important first step, the underlying problem of borrowers entering foreclosure due to unsubstantiated list price demands remains.

Federal Housing Finance Agency

  • On Jan. 8, 2013, NAR staff met at the Federal Housing Finance Agency (FHFA, Fannie Mae and Freddie Mac’s regulator) to discuss persistent problems with Fannie Mae short sale transactions.  During this meeting, FHFA and NAR held a conference call with REALTORS® from across the country regarding Fannie Mae’s short sale valuation process.  A summary of the call is as follows:
    • Since August, there has been a dramatic increase in values for short sales with Fannie Mae.  This seems to be the rule rather than the exception.  In the last 90 days, short sale approval rates have ranged from 20-50 percent.
    • When short sale valuations are disputed through the escalation process, some Realtors® felt cases were not being thoroughly reviewed by staff.
    • Fannie Mae appears to be asking for more than the fair market value regardless of the valuation method used—AVM, BPO or appraisal.  Fannie Mae’s escalation staff is in Dallas with in-house appraisers on staff who are assigned to particular regions of the country. 
    • Complaints about Freddie Mac have not been as numerous, though some markets (e.g., Nevada) have experienced short sale pricing challenges with Freddie Mac as well.
  • At the conclusion of the meeting, FHFA GSE examination staff requested that NAR provide specific short sale cases sent by REALTORS® for review and agreed to meet in the coming weeks to identify patterns and continue to work with NAR on finding a reasonable resolution.

Next Steps

NAR remains concerned that Fannie Mae’s recent short sale policy changes could significantly increase the number of borrowers ending up in foreclosure and hamper the success of FHFA policy changes to Fannie and Freddie’s Standard Short Sale processes. NAR will continue to work with our state and local associations, the GSEs, and FHFA until fewer borrowers end up in foreclosure when a short sale could have been completed, benefiting all parties to the transaction.

What can REALTORS® do?

NAR encourages REALTORS® to submit problematic transactions on for escalation review to

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Fannie and Freddie will have NO CHOICE but to back off and come down from their absolute ridiculously heinous attempts to manipulate the markets across the country and FOOL people into thinking that prices are continuing to rise above what they actually ARE.  The problem started back about March or April of last year, when we were getting into the swing of the selling season ...spring and summer. At that time, due to interest rates being the low, it brought out tons of buyers, and yet we had a lack of inventory. Whenever this happens...too many sharks swimming around the same causes a feeding frenzy..which is what happened driving prices up in many parts of the country as we went thru spring and summer. However, once fall and winter came around and prices started to level off and had greedy and  inexperienced BPO agents, and NOT even the agents, but their assistants running around who aren't licensees, many are not even 18 years of age, etc...taking pics and trying to do 10-20 or more BPO's a day..churning them out for the agents trying to get REO listings and forcing their assistants, etc to do all the BPO's for the banks to get the listings. Problem one was watching or policing these people doing these BPO's and they just churn them out and want to be a shining star in these bank's eyes, so they'll get the listings by promising them or just trying to follow the trend of prices going upwards. So if Fannie and Freddie get tons of these erroneous BPOs turned in, showing them prices are going upwards...what are they to believe??? IT's NOT TRUE! U know it..I know it , and every agent out there who knows the TRUTH knows it...but now, NO ONE has shown Fannie and Freddie that the upward swing has leveled off or they continue to get these ridiculous figures in from people doing BPOs just to churn them out and get paid...which is ruining it for the actual market out there.

Even though we have a lack of inventory...NOW..I see tons of listings on the mls that SHOULD have SOLD, but because they are listed at such ridiculous prices in the 1st place or at prices they won't even APPRAISE, whether it is a standard sale or REO....NO ONE is STUPID enough to make an they are now just sitting there, not selling until a reasonable price reduction is done OR a savvy buyer makes an offer and sends in supporting evidence showing the seller whether it be a private party OR REO Asset Manager...that the price they want WON'T EVEN APPRAISE!  It's like the chicken or the egg? Which comes 1st??? 

As soon as they see properties SITTING with NO OFFERS sell when the price comes down...and tons of APPRAISALS from buyer's lenders doing the loan show them the property won't APPRAISE....this sick, twisted roller coaster ride we're all forced to be on will continure....but hopefully, will force the turn off the switch...and let us EXIT the bumpy  ride we've been FORCED to be on...


Hi Sheyenne and all others who have no idea what us BPO agents do, please allow me to clear the air once and for all because I am so tire of being blame for why your Short Sale failed bcause the BPO didn't come in at the price "you want." You can call this piece, "A Confession of a BPO Agent" if you like. I will address it in bullet point format so it is easier to follow, so here it goes:

Before I start, let me give you my credentials so that I may have some credibility in your eyes:

-I personally completed more than 9,000 BPO within the past 5 years

-I continue to do about 250-350 orders a month, doing anywhere from 5-25 orders a day

-I worked with 20+ third party companies online

-I started to prospect for Short Sale last summer, currently has, manage and facilitating 21 listings with 5 Short Sale closed since I began prospecting.

-I have had many fails with short sale, ranging from owner suddenly wanted to do a loan mod with an auction date a few weeks away, to already being approved but the owner didn’t move, buyer didn’t sign, property was foreclosed the following Friday, to simply the owner just either disappear, don’t respond, don’t provide documentations in time or simply not interested anymore… not sure why. BUT I haven’t had a failed yet where the BPO came in too high and the buyer walked and the homeowner got foreclosed on because of that. “Yet” is the key word here as I too is starting to run into the same problem with Fannie Mae loan like most of us, you can see one of them here…

OK so let’s start:

-No, I don’t do BPO for listing, maybe 1 out of 10 companies out there does that and chances of you getting a listing from a BPO is zero to none now. It might have been more frequent when this whole “epidemic” started, but the big guys with the big accounts that are already in with the servicers/banks since the beginning already got it secured, you can’t compete with them for the REO business. For the record, I have not gotten a listing yet from doing a BPO.

-For those agents who still think they can get into the BPO/REO game, I will just smile, shake your hands good luck, turn around and rolled my eyes. Fresh blood incoming, this is the reason why the vultures are still circling…

-No, we don’t over valuate to “look good” in front of the bank, we don’t even work directly with them. Most of the companies that assign BPO don’t assign REO.

-No, we don’t intentionally overprice a property to kill your deal, putting a value on a property is an art and it takes lots of experience to master.

-Yes, there are incompetent BPO agents out there that don’t know what they’re doing or understand the market, you WILL run into them. But most of us “veteran” know what we’re doing; most of us understand the value of a property more than YOU DO, believe me. And we’re UNBIAS. When you put things down on paper/form, add your adjustments in, the values becomes much clearer than if you were just doing a CMA and then price it in your head.

-After adjustments, most of the time we will have a range of price to put the subject in, it could be a range of $5,000, $10,000 or even $30,000, example $150K - $175K adjusted sale comps range. Banks appears to put more emphasis on Sold comps than current list comps, why? Perhaps Sold comps are "proven," list comps are anticipated. Where we place the property value takes lots of debating and experience. It is not that easy.

-Something you may not have thought about; a BPO is an “opinion,” so is an appraisal. It is just an opinion of the person who is completing the report and I know you have your own opinion too. Sometimes we have the same or similar opinion, other times we don’t. I am pretty sure not all of the buyers that walked through your listing would agree with your list price either. So get over yourself, your opinion is not always right, nor is mine.

-Yes, sometimes the experts makes mistake too, and so does everyone else. Live with it, s*#t happens.

-Yes, some of us have assistants to do certain tasks for us like prefilling the repetitive information on the BPO forms, to taking in orders, to coordinating our routes for us, but most of us still pull our own comps and put the final value on our reports. I know I do, I can’t vouch for others.

-Almost every site I work on has their own way of how they want the BPO to be completed. Some sites have multiple clients who also want things to be done their ways too. There are some clients who have general guidelines, while other has very strict guidelines on how to do the reports. Some would restrict the use of Pending Comps as they often are not very accurate indication of the market, some restrict the use of Short Sale comps, some restrict the use of REO comps, some only wants FMV comps to know where the FMV are at, while others will want a combination of these or all of these together. So don’t just do your CMA, head priced your listing and expect the BPO agent to see the same comps as you do.

-The info above is primarily the reason why I don’t take any of your comps. We don’t get pay enough to waste time having to redo a report; some of your comps will be out of the guidelines that I am required to stay within. Well, let me be honest, MOST of your comps you give me will be out of the guidelines I have to stay within because most of you will pick comps that will ONLY SERVE your purpose, that means comps that could have sold more than 6 months ago, out more than a mile in an urban neighborhood, etc. My purpose is to determine the value of the property according to what the closest proximate comps indicate, the latest comps sold for, the market trend and the value trend of the neighborhood while remain unbias. I have, years back, taken comps from the listing agent and find that they are 1 mile, 2 miles, or the lowest comps they could find persuade my value, but they are not realistic comps. And some of these folks are flippers and/or having shady dealings with the buyer, or they are the buyer themselves, coming out to meet me. Please don’t waste my time.

-No, I don’t want your repair estimate either. I have had so many over inflated repair estimate that I don’t even know what to believe anymore. That’s why I just decided to not look at them at all. I’ve seen repair estimate for properties that only needs interior paint and some floorings go well over $100K claiming mold eradication for the whole house when all I can see is a spot of discoloration near a corner the size of my fist, complete new cabinets, interior/exterior paint, carpeting/flooring, new appliances, new roof, etc. And these come from agents and broker alike. I don’t know what these guys thinking, we’re fresh blood, ripped for the picking? I am not dumb; I can see and feel things too.  What I can say on the BPO report is what I can take a photo of, period. 

-Yes, it is VERY annoying that I have to set a certain time out of my busy route to meet you so that you can point out every single little thing that is wrong with the house. I will not put repair estimate for a hold in the drywall resulting from the occupant slamming the doorknob into it, or a few spot on the bathroom sink needing some caulking, etc. for $25. These are DIY maintenance that is not significant enough for a repaired value.

-Beside from the fact that I have to get photos for 20 properties before the sun goes down, the above is the other reason why I will avoid setting an appointment with you. So when I am there at the appointment, I expect you have very good information about the property, the neighborhood, the listing history or something that I may not know about. If you want to meet me just so you can give me your comps and persuade me to give up my value or go to your value, you will be on my Stupid-Idiot- Annoying Agent/Avoid-like-a-Plague List.

-But most of the clients specifically RESTRICT us from being influenced and/or taking info/docs from a third party anyways. There are shady people out there doing shading things, including agents and brokers. You need to realize that the listing side has bad apples too.


-So next time before you list a property, you’ll have to do a CMA like a BPO agent does and here is the guidelines that most BPO will likely have to follow:

-Stay within 0.5 miles of the subject’s property for Urban properties

-Stay within 0.5 miles of the subject’s property for Suburban properties

-Stay within 3 miles of the subject’s property for Rural properties

-Stay within 15% - 25% of the subject’s Above Ground SqFt

-Sale Comps has to be within the past 6 months

-No Pending Listings

-No Short Sale comps (I am seeing more and more of this requirement)

-Pricing your listing based on the guidelines above and you will most likely be within approval range of your short sale. Negotiation is not as big of a part in Short Sale as you think; it is more about being within the servicer’s range to accept. With the BPO guidelines above, you already have taken most of the guess work and negotiation out of the Short Sale process.

-Learn to set the Buyer and the Buyer’s Agent expectations. “I list my property at $xxxxxx because of these comps I’ve found under these strict criteria that most BPO agent will use.”

-Learn to ask question and re-educate the Buyer’s Agent of his/her duties, “Your buyer’s offer is $xxxxxx, how did you come up with that number?” “You should not have taken my list price into consideration as it is just my opinion, not the bank. You should instead educate your buyer to base their offer on the neighborhood comps because that is what the BPO agent will see, and that will be the bank’s value of the property.”

-Don’t recommend your Seller to sign any offer without the Inspection being done within 10 days of mutual acceptance between the SELLER and the BUYER, not Lender Consent. Education your Seller about finding a committed Buyer and the important of the Inspection being done upfront. “The buyer needs to show commitment to buy the property because the Seller will have to commit the next 2-5 months to work the Short Sale with you, and at the same time risking being foreclose upon. If I don’t think your buyer is committed, I will not recommend my Seller to sign your buyer’s offer.” Don’t take a chance with flaky, un-decisive buyer. If you are not close to the Auction Date, there is no need to rush to accept an unnecessary offer. If you are going to do something, do it right the first time so that you won’t have to redo it. Sounds familiar? Can you relate it to Short Sale? How many of us have to restart a short sale because we didn’t go with our guts and took on a questionable buyer who walked a few months later? Me? <- Guilty!

-Take advantage great advice like:

-Stay up-to-date with what’s important like: and You are here on this site, which is a huge plus.


I am in no way claim to know everything or anything. The info above is not to be considered as advice because comparing to most of you on here, who I highly respect and proud to be among, I am just a baby in real estate, especially in Short Sale. Therefore, please take the above gibberish as a vent from a fed up BPO agent who is just tire of hearing from people who don’t understand our capacity of work, tire of being used as a scapegoat for why YOUR short sale FAILED because perhaps you didn’t price your listing right or perhaps you FAILED to correctly set the buyer and the buyer’s agent expectations of value. At the end of the day, it is what it is.

-Stay within 0.25 miles of the subject’s property for Urban properties***

Wow!  You laid it out. still are not recognizing the problem of FNMAE absolutely refusing to acknowledge, documented pricing.  I refuse to take FNMAE shorts anymore..5 years of doing shorts.  They need to change their pricing system.  It IS about something other than completing their short sales.

You have to wach your mouth chino.

in our market we have most of our comps as short sales so that is not an option ofr us. I have also done thousands of BPO's over the last few years and I do get it but this is not about your BPO but what happens to it after it goes to Fannie/Freddie.....they are taking your value and raising it by 20% to 50% and THAT is the issue.

It is obvious that you are new to the short sale market but please lighten up on us who have been getting our hand dirty with this for years now.

Your post is a little harsh and insulting for those of us who are very involved in much more than completing the BPO.



I think your tips on how to price properties from the outset are informative and helpful.  However, I don't think that you make a very good case for the legitimacy of your professional standards - quite the opposite. 

From what you are stating here for the volume of BPO orders you perform, somewhere between 5 and 25 a day, to me that relates at $50/each to $250 - $1,250 dollars a day income for you.  Not a bad gig compared to actively selling real estate. 


If we further look at the monthly totals you tout of completing 250 - 350 BPOs per month that would generate a WHOPPING minimum income to you of $12,500 - $17,500!  Sounds very similar to the "robo-signing" debacle that was uncovered a few years ago.


I HIGHLY doubt that there can be much care given to the accuracy of your valuations with the numbers you are reporting for completed BPOs here.  I am in agreement with Sheyenne that many of BPO agents use other unlicensed and inexperienced people to help them reach this type of high volume to pad the BPO AGENT'S paycheck.  Or, they do a high volume and simply have sloppy standards for the care they use as they have little or no personal consequences. 


One other quick note.  If you think you have a busy day and decide to condescendingly label your fellow real estate agents as people to put on your "Stupid-Idiot- Annoying Agent/Avoid-like-a-Plague List," you might want to consider that there may be a time when you are back in sales and your cash cow is gone.  Other professionals in your community will likely remember the disdain and apathetic nature you treated them, and their clients, with.  Just my two cents.

Great site. Great information. Thanks to all.

Does anyone know if it is worth escalating a SS case to Fannie Mae through the site?

Quick background:

  • West Palm Beach Condo
  • Investment Property
  • no Second lien
  • HOA fees paid to date.
  • Mortgage payments delinquent more than four months.
  • GreenTree Servicing
  • Contract from buyer submitted with SS paperwork to Greentree several months ago.
  • SS actually accepted but GT made offer $13k over FMV ($63K offer from buyer, GT counter was $76) Realtor ordered inspection and appraisal to submit for comps. No luck
  • Buyer backed out.
  • Greentree instructions were to relist property. Doubt offers come in at GT offer price.

Any suggestions on how to be proactive or do we have to wait for higher offer to submit to Greentree? Just wondering what strategy to implement at this point.

Thank you

(Owner, not a realtor)

Place it on the market at the higher and then slowly reduce until sold again.  You do need  better offer if at all possible. Even if it takes a few months. Time on market will be your friend if you do have to dispute the value given from Fannie Mae.

It has been suggested that we use an old tactic of listing properties for the over value they want and recording outcome, lowering as time goes by and proving the real value that way. 

Hope this helps. Of course the seller needs to have the time to use this tactic.

Is there or will there be a similar site for Freddie Mac short sales?  I'm disputing value on three Freddie properties right now. 

I actually spoke to a rep at Freddie, a special case manager for one of my special cases, and he said that what has happened is that Freddie Mac has broadened the delegation capabilities of servicers.  Freddie and Fannie determine a "minimum net proceeds" based on AVM's and not BPO's.  The servicer can approve the short sale without sending to Freddie or Fannie, as long as minimum net proceeds are met.  So the BPO ordered by the servicer can and may be in line with offer price, but it's not meeting investor's minimum net proceeds (based on AVM) so is rejected.  I'm dealing with this on three Freddie files and one Fannie file.

And this should be receiving more attention:

"Fannie Mae and Freddie Mac may require repayment of some of the shortfall between the value of the home and the mortgage balance -- if the borrowers have the means. Homeowners who apply for deed-in-lieu transactions may be asked to make cash contributions of up to 20 percent of their financial reserves, excluding retirement accounts, according to the guidelines."

Does anyone have a contact at Fannie? I have escalated the issue and do not get any response.





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