Comment

Comment by Catherine Gheen on February 22, 2011 at 9:00pm

Nope I had a file this morning for a modification and they turned down stopping the trustee sale and said they would not review the file.  I really need a good contact who is a manager in modifications.  I keep emailing the CEO but when it comes to modifications it takes days to hear back from someone.

Comment by Catherine Gheen on February 22, 2011 at 8:57pm

I am the listing agent and they are not but yes they are being paid to send in a value

Comment by Catherine Gheen on February 22, 2011 at 8:57pm

Well here in California the BPO agents are paid, otherwise they would not do them?  I have been contacted by two agents today on a file and they were both being paid by the bank's or their third parties who sent them.  I had to ask each of them if they were instructed to NOT use current short sales or REO's in the complex in their determination of value

Comment by Jim Hale on February 22, 2011 at 8:53pm

I do not know about other states, but it is illegal here in Oregon to provide an opinion of value for compensation (say $50) unless it is provided in pursuit of a listing.

So BPO agents have a conflict of interest in every case.  They may be deluded as to their likelihood of getting the listing, but they had better be hoping for it.

The real question is why investors want to hear from anyone with a conflict of interest.

Comment by Catherine Gheen on February 22, 2011 at 8:40pm

If these agents had half of the training a real appraiser had we would not have so much trouble in fighting values that are not what the real market is.  The Principal of substitution and Appraisal Rule 7(2.) state that the person performing the BPO has a vested interest in the outcome of the value they place.  Start doing your research and you will agree.

Comment by Catherine Gheen on February 22, 2011 at 8:38pm

I think more agents should utilize The Appraisal Institute for a resource when fighting value with a lender.  The Appraisal Institute has a team of attorney's who are there to support the valid argument that a BPO DOES NOT override a REAL appraisal.  I do not agree that most of the agent who are out selling their souls for the $50. bucks have any business bringing in these values that are far higher than a real appraisal.  Most of them think if they bring the value in high enough they will be chosen by that bank to be their REO agent.

Comment by Justin Berry on February 22, 2011 at 7:01am

@ Kevin -  I agree completely.  Perception of value is the name of the game here.

Comment by Ben Benita on February 22, 2011 at 5:10am

Still can not believe someone at the Servicer said little weight is given the BPO.

 

I know these are the general guidelines for approval (as you note, all based on the bank BPO or appraisal):

 

Fannie Mae (FNMA) – 92% of BPO

Freddie Mac – 92% of BPO

VA Loan – 88% of BPO

FHA – 88% , 85%, 84% of BPO depending on time frames (see HUD pre-approval)

Conventional – 75% – 95% of BPO

Second Liens – 5% - 10% of amount owed

Third and other Liens – 5% - 10% of amount owed

 

so how can they say the BPO does not matter?

Makes no sense.

 

Comment by Kevin - Greenville, SC on February 22, 2011 at 4:46am

@Thom,

 

You would think so... but in a situation I have with Chase they are not accepting a full appraisal for what they will accept, but are sticking with their BPO value which is for over $100,000 more!  And yes, I have escalated at the servicer and investor level with no change in value.  

The BPO has expired now and Chase is doing a full appraisal today.

Comment by Thom Colby CA Brkr 888-391-5245 on February 22, 2011 at 4:41am

@Ben -

I've too have been doing Short Sales for 5+ years as 100% of my business.  I guess we're the lucky ones who embraced Short Sales rather than running away from them like so many others!

 

To clarify my fragmented posts;  In speaking with BofA, Wells, Chase, SLS, Aurora, Indy/OWB, NB-AZ, First Horizon/First Tennessee, and others, I always ask "where we are in terms of the BPO" when we're negotiating a settlement / approval.  All of them, without hesitation, have said the BPO in most cases is given "very little weight" when the final decision is made.  I've gone back and reviewed many of my closed transactions over the past year, and there is no "formula" that I can garner from; what was owed; what the BPO Value was determined to be (I get most of them to tell me what the BPOs were) and what the final sales price or net-to-the-bank was.

 

I've been told by several servicers, the Appraisal carries the most weight followed by what they find on Zillow (believe it or not!) - not the BPO.  So that begs the question, whay are they doing BPOs if they don't carry much weight - - I don't know that answer but it's a great question!

 

@Kevin  - YES there is weight to a formal Appraisal by a licensed Appraiser.

 

In CA, Short Sale Negotiators & BPO Providers must be licensed by the DRE in the State of CA - and - also must carry E&O Insurance specifically covering either / both of these activities.

I'm happy to hear so many folks have been doing Short Sales since the beginning - there's not many of us that have been doing it that long and we all need to keep these distressed properties moving along!

 

I hope this helps explain my perception / position on my posts.

 

Best regards,

Thom Colby

Broker / Negotiator

Newport Beach CA

Member of the Board of Directors,

Pacific West Association of REALTORS

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