Why on earth would a lender order a "retro appraisal" for 2006 values?  This lender kept countering back at $40K more than the fair offer we have.  We kept asking if they had more land included in their value.  After wasting a few weeks, they finally did check.  I kept reminding them that the mortgage only encumbered one lot and the contract was including two lots.  The seller owned more land than just the two lots, too.  This is also one of those BOA Equator mystery decline files that we have to initiate, again, just before we were due to receive an approval letter.  Now, they informed us that their BPO was based on three lots.  Still waiting on their completion of their new BPO review.  But, it is alarming to hear that they just ordered this retro appraisal.  Any ideas?  Is this good or another bad turn for this file?

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  • New update:  this file closed last week! : )

  • I have to update you on this file.  We now have short sale approval.  New BPO, new Buyer, new process as we had to re-initiate.  Seller still qualified for HAFA.  We are due to close the middle of this month - they even gave us an extension for the Buyer's FHA loan.  We were initially concerned when we found a new AOM of record whereas they added two lots to the legal description, but that doesn't add more property to the mortgage that the AOM attaches.  These "toughies" just make you appreciate the closing even more!

     

    BTW:  lovin' the new BOA procedures, so far.  It's a lot of work getting all of the items prior to initiation but gives the Seller more motivation to provide the docs as you simply cannot initiate without them.  Personally, I have had several frustrating times with BOA, but when I consider how many BOA short sales that we do, it isn't bad and they seem proactive in working diligently to improve their process to minimize the amount of time.

  • I am unsure as to what came about from the "retro appraisal", but know that the new BPO that was ordered came back at the same amount as the first, even though the first BPO was performed with 11 additional acres of land included in error.  So, their BPO amount was the same with 11 acres included as without the 11 acres, which were not encumbered by the mortgage.  Only the house and one acre had a mortgage attached.  Result?  Buyer walked.  The seller had even included an additional acre of land with the contract toward the short sale.  BOA is the lender.

    • I believe a retro bpo is the same as an 'historical bpo'....of which I've done.  Usually a lender looking at comparables in the past....confirming prior value.  Hope that helps.  Oh, in my neck of the woods, additional lot size isn't extrapolating a lot more value in this soft/market.  Tough times. OMG! 

       

  • I have heard of this happening as they more then likely are trying to find out if the property was over-appraised as I have had some Banks here in Chicago send me an appraisal to review with a lot of questions.. Granted, I no longer hold my appraisal license but I generally can figure out if the property was sold for more then what it was worth. Happens alot. If the file comes back that the value was too high back then, then it is a good turn for you. I have looked at new construction here in Chicago for banks that are holding title and my first statement generally is: I hope you fired this in-house appraiser. They recognize but want another opinion as it is hard to justify at times. Just my two cents.
  • I am a Certified Appraiser & have done many retro forensic field reviews over the last few years.  Typically, the issue is over-valued appraisals, and the targets are the individual appraisers' licenses & the lender that initiated that appraisal to give loans on over-valued properties. Many times that homeowner is still there & trying to do a modification or short sale.  Many of these reviews are initiated by FNMA, and are aimed at lender put-backs, to decrease the loss to FNMA for a foreclosure or modification.  When I get a review on Big Bank Loan who used their in-house appraiser to justify value, I admit that I have to smile.  The Big Banks shut out independent appraisers for the most part so that they could make appraisal income another profit center.  No worries for the homeowner (unless HE committed a fraud).  But appraisers may be losing their licenses or see their E&O ins go way up!  BTW, by over-valued, I mean ignoring the fact that the comp sale had a basement or 3rd car garage, or extra 200sq ft addition, or additional bathroom, or pool or...  If appraisers don't pull the MLS, it is like knitting in the dark...you may get away with it sometimes, but when a light is shown on it, all the nasty errors become obviously visible!
  • Hi Kristy,

    I had an appraiser call me 2 weeks ago on a short sales I closed at the begining of the year and I asked him why he was doing an appraisal on a property that was already closed.  He told me that the MI company on this transaction had order a forensic appraisal on the property for the year 2007 which was when the loan was taken out.  I asked him the reason for this & he said that the MI company wanted to make sure that there was no fraud perpetrated on the original appraisal.  I was concerned for my client but the appraiser said it was just about the appraisal. 

  • I've been doing more "historical" bpos lately...they're checking values at the time of the effective date of a previous loan.



    Gabe Sanders said:

    I've had this a few times in the past.  It could be as Bryant said above.  Occasionally they are also checking trend values in local markets as well.
  • I've had this a few times in the past.  It could be as Bryant said above.  Occasionally they are also checking trend values in local markets as well.
  • They are more than likely auditing the original loan and value.
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