We are in the beginning stages of disputing the value of the home we are attempting to do a short sale with. I do not understand the process, or how to start, my agent doesn't seem to either, and the bank will not provide a copy of their valuation. I do not know whether it was a BPO or appraisal, or just a number they pulled out of the sky. It's Navy Federal Credit Union
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Military has special rights - I have not followed them, so cannot say specifically, but be sure you have looked into what the bank can and cannot do to you.
Did you talk to Freddie? Or did you get that from your agent who got that from the bank "specialist"? A huge portion of bank employees gladly overreach and will say anything - partially because of ignorance, partially because they get praise for getting rid of your sale as fast as possible and only get in trouble for promising too much, never too little.
Not including retirement, do you have a bunch of money so that you can hand over $25K? Most of my sellers are on the verge of crazy and pretty much broke. I drag the negotiator through the bank statements and the expenses and debt and make him tell me where this extra money is. My contributions usually go to $0. Think of dealing with the bank as dealing with the lowest life used car salesman - or worse, politician. Their word is not to be counted on, they disappear, they say anything. And, as recently written about BofA from a court case, they are given incentives to destroy short sales and punished for letting them go through.
Freddie DOES tell the bank to ask for a contribution regardless of how clearly broke the seller is. Is that what you have or is a contribution reasonable? In the past, I have recommended $1K so that I could make sure that they would release the debt. I don't think that is necessary w/Freddie anymore - they will release upon a completion of the sale.
Dealing with these banks for short sales is difficult. Their boss, the investor, doesn't treat them as employees and lets them get away with murder. You could have a lousy agent or you could have an excellent one who has run into the "we don't care" buzzsaw of poorly managed bank people.
Your terminology is confusing - you say "my agent" but also say "my buyer" and say "contribution" which only pertains to the seller. These don't fit. I'm guessing you are a buyers agent and that you have nothing to do with a contribution.
A little weird - why would you want to "continue" having the buyer pay too much for the property and pay for inspections, etc. and then decide they are paying too much - with no reason? I can only see that as a strategy if your buyer is willing to pay what the bank wants but you'd like to try to lower that. Getting the bank to the point of issuing an approval is a strategy that can help (they have more skin in the game at that point). I see this when the buyer's bank comes back with a reasonable appraisal and won't allow the buyer to proceed at the wild number given by the seller's bank. Banks believe everyone is a thief except a fellow bank, so they usually buckle to the reasonable appraisal.
I see contributions based upon seller's ability to pay and investor asking for it regardless of ability to pay (which is unethical but FNMA and FHLMC do it all the time - does grandma really need actual hospital care?). I don't see this based upon property sales price. Also, if there is an MI in there, they often have an agreement which sucks everything out of the MI so the MI may demand its own contribution such that they get something out of the deal.
It is unlikely that a value dispute will have any effect on a contribution request. And, yes, you can continue and dispute the value later. At times, this comes as something discovered by the buyer that will cost $xx to repair before the property can get a C.O., etc. People expect a decent reason for a change, of course.
I didn't think that the bank had in writing that it was required to give you the BPO. They must give you the appraisal if it is FHA. However, on one of these forums, someone pointed out that they must give the homeowner these things. I did not follow it in detail. As with many things, the bank will deny that you have the right to these. Management always tells them so (just like they tell you that they cannot tell you who the investor is - in direct contradiction of the federal truth in lending act). They will say that they paid for it so it is theirs. I think, in reality, there is a law that any evaluation by the bank must be made available to the homeowner.
Since Fannie Mae has admitted to boosting the price 20% over their BPO, I don't know that it makes a real difference knowing what their BPO is. It is funny money not based upon reality (or realty??). Also, Freddie, and I think Fannie, will, at least sometimes, use FMV or AVM or whatever they call some "fair market value" database. I found that our MLS has access to this database. I compared several FHA appraisals (which are so superior to the wacko BPO's we often see - worth reading through if you doubt it - very thorough - by someone with a license to do just appraisals), and I found huge differences - FHA appraisal $260K (which, for this property, still has not attracted a buyer at $240K for over a year), and the FMV from the database was $485K.
My point is that they have to know that they numbers are often insane but they don't care. You need to fight for honesty and prove that your numbers are right, yet seeing that FNMA admits to bogus numbers, you may also need to call on state senators and state AG's or TV news reports to shame the entity into being honest - as you can see in several on-the-web news casts from the West. In other words, don't necessarily waste time on trying to get their number and see what is wrong with it - get your own solid numbers and force them to deal with that.