Innacurate BPOs, Why?
I may have just figured out why there are so many inaccurate BPOS. Check out this email that I just got from someone who will do my BPOs for me for $18.00 each. Names and numbers omitted on purpose
This is XXX, writing to you from XXXXXXXm Inc, seeking possible
partnership with your firm for researching and completing BPOs on your behalf
for multiple vendors. We work on behalf of Real Estate Brokers; furnish BPOs
that gets assigned to them. XXXXXXX Inc, has been delivering quality
real estate data & software services to partners across the US. Our BPO
expertise include banks like REO Trans, IAS, Dispo Solutions, First American,
PCV Murcor, Ocwen, Clear Capital, Quality BPO's, Nations Valuation Services,
AVM, etc.
We offer our service at an extremely competitive rate of 18 USD per BPO with a
live workforce available 24/7 or on a need basis. Our team is currently
producing over 100 BPO/day on behalf of brokers across the nation. Please feel
free to contact me via email or at (555) 555 5555 for discussing more about the
possibilities. You can also find more information on our website:
So let me get this straight, they can give an accurate BPO from across the country? They can choose which homes are closest to the subject without knowing the first thing about the local market?
I wonder how many agents are doing this and I also wonder how many inaccurate BPOs are the result of this?
Replies to This Discussion
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Permalink Reply by Jim Schneider on
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Jeff,
I agree that if this is widespread, it's likely a part of the problem. I'd say there are two larger factors happening more frequently:
1. The low pay of bpo's: with agents getting $35-75 for a bpo that can take 2-3 hours, corners are going to be cut so agents can maximize the number of bpo's they can complete.
2. Agent believing (often mistakenly) that they can get the listing if the bank takes back the property. This might incentivise over valuing the property to prevent a short sale, so the agent can list it as an REO.
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Permalink Reply by Jeff Payne on
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Good point Jim. Agents who do them for a living have to do alot of them to make any money.
The agents that think they will get is as an REO are definately often mistaken. If they do get it, they have an overpriced REO because of their silly evaluations. We had an agent here who was famous for this and we started refusing access to him and that took care of the problem
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Permalink Reply by Sam on
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Just another reason they should not be using agents to do BPO's other then as additional support to appraisal if large loss. We just lost a property to forclosure because the BPO valued the property at $180k when we could not get an offer above $130k, nor should we have. The bank actually bid $180k at the auction so they really did and do think that is what it is worth. If they would have ordered an appraisal, the property would have appraised for $135k or less and we would have been able to get a short sale done, now the homeowner has a foreclosure and judgment, will file for bankruptcy, and the banks loss will be much larger, with additional damage done to the community property values. I am waiting to see if the BPO agent gets the forclosure listing, if so and they list the property less then $180k I am personally filing suit.
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Permalink Reply by Smitty on
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$18 ??? I can't buy a decent dinner for $18, so what QUALITY are we talking about here? Do I say DRIVE BY???? Who can do this for $18? The gas alone would be half of that anywhere outside 45 miles. Makes me sick
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Permalink Reply by Sheyenne Schultz on
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Jeff You and I know that getting accurate BPO's is like finding the Holy Grail. lol Most BPO's are done by an assistant to a budding REO agent and not even the agent themselves. I've had BPO people come to the property and get lost 3 times BEFORE they even showed up because they DID NOT know the area. Then when they showed up they barely spoke english. And most were not even 18 yrs old...most are the brother or sister or friend or cousin, etc of the agent getting paid on the side and who can half way operate a camera. Heck, if the BPO people showing up can't even find the place, speak english, or know how to take a pic or know what a COMP is... Then how the heck can we expect some company across the country to find an accurate value for the property??? This is exactly what the banks do. Remember, they have their guys sitting in a room staring at the screen doing THEIR comps from across the country too. Looking up comps on Zillow...etc... ZILLOW???? R u kidding me? OMG!!!! I've had banks TELL me this...that their guys are in those rooms using Zillow among other sites... I fell off my chair so hard from laughing. Their comps r the biggest laugh of all. And these BPO people are who the banks are gonna listen to on a value of a property because JULIO the BPO guy SAID SO?Heck..they might as well send Beavis and Butthead......OOOOPS!!!! I forgot... They already have.....
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Permalink Reply by Christine Frank Fuentes on
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Sheyenne, you seem to be letting a little bit racism creep into your commentary. JULIO may speak better English and perhaps know to capitalize the word when writing. More to the point would be to discuss the servicers that utilize templates not allowing for depreciation or variables that cannot be plugged into that same template.
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Permalink Reply by Patrick Willard on
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I started doing BPOs and REO in 2000. I liked doing BPOs to try and get my name in front of potential REO clients, to keep up on the market in different neighborhoods and for the extra money. In those days the least paid for a drive by was $50 and we had at least three days to complete, Some companies paid way more and gave 5 to 7 days,
Now, you are lucky to get $50, $35-40 is more likely, and they have to be done in 48 hours or less. In addition to the larger REO brokers using auto accept software and outsourcing the actual work to unqualified people you have agents that don't have a clue wanting to do them to "hang on until the market gets better".
Most BPO work is outsoursed through third party BPO companies. All they want is faster and cheaper. Also they broadcast assignments to everyone that covers the zip code and first to accept gets it. I very rarely accept assignments anymore and have asked most companies to drop me from their vendor list. Not only is it not worth the time but I constantly have to defend my work because of others mistakes. Last year I was contaced and told I needed to get new comps and redo an order because I said the subject was 1250 SF and they had 2 prior BPOs saying 1800. I sold homes in the development new in the early 1990's and new the larger 2-story homes were only about 1800. I proved I was right using older MLS sales and google maps satelite view but it would have been easeir to do what they asked. I quit that company because this happened about 1 of evey 3 orders.
Similar things happening in REO. Quality is less important than faster & cheaper.
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Permalink Reply by Pat Chadwell on
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GEEZ...
As a result of a bad BPO a few years ago, I make it a point to give the BPO agents the comps. The BPO agents are happy for them as it saves them time and I do not get surprises because the agent is unfamiliar with the area. Of course this only works IF it is an internal BPO and not a driveby.
This is an evolving situation - it can get worse or it can get better. Hopefully these lenders will get some guidance from those of us that know so it can get better. Chances of that might be nil but I can hope.
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Permalink Reply by Katherine Muhs on
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Giving the BPO broker the comps seems like a good idea; however, I just tried that. The BPO broker couldn't have cared less. While we were standing in the property (I had to accompany him because he wasn't even a member of our MLS) he looked at the comps I supplied and replied he had already used some of them (but also used other non-comps that look like comps on paper). Gasp! He already had chosen the comps before seeing the property? Of course the BPO came in way too high. I filed a verbal complaint with the BPO vendor, and a written complaint with the short sale negotiator. Where are we now? The negotiator/investor did lower their required price but it was still way too high. I also received a stern scolding from the negotiator for pressing the issue (what?!) Buyer walked. Next time, I'll see if I can refuse access to an unqualified BPO broker/agent without breaking any rules.
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If a home goes through short sale quickly, the Loan Servicer is paid a minimal Govt bonus.
If the home is listed as a short sale and the entire process drags out for an extra 12+ months and the Loan Servicer is paid their higher rate for handling this distressed asset each month + their cut in the foreclosure lawyer fee + their cut in the foreclosure trustee fee + their cut in handling the resale of the REO......
Let me know the incentive for the Loan Servicing company to fight a high BPO that they can show the Investor?
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Jason, that is true and makes sense but only for the servicer. What about Fannie Mae? They too are famous for over inflated BPOS or inaccurate BPOS. What benefit would they have to delay a short sale?
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Fannie Mae is simply the investor behind a Servicer, just as in any other loan.
I am not saying this is some big conspiracy, I am just saying that in large bureaucracies there are not always the checks and balances in place to address this type of inefficiency. I am certain they know about it (they are a lot smarter than most give them credit), but putting together a plan and then implementing that plan takes time.
There is a saying in a bureaucracy, "what gets tracked, gets done". Fannie does track and rate servicers on many performance metrics, though I am not certain if I have ever seen a chart comparing short sale BPO to final sale price. It is likely they do not chart those two factors because of the length of time between the two and the fact that so many markets have moved so quickly.
As more and more pressure is put on Servicers by their Investors to increase the percentage of short sales to foreclosures, no doubt the Servicers will suddenly have more short sales. If you have ever managed or even studied the way that Senior management goals are thwarted by bureaucratic rules and inconsistent incentivization throughout the organization, you can see how all of this can happen and yet it is not the desired result.
Happens all of the time.
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