War on BPOs – Realtors vs. Appraisers

Mortgage and Lending with First Colorado Lending

One of the biggest problems has been in the current real estate market has been the time it takes for the lender to review the short sale package. Short sale offers have been hampered by cycle times that have easily lasted months and most time you will not get a retail buyer to wait, as they are looking for a home that they need to move into in a reasonable time. The only buyers who will endure a long delay are the ones who are willing to trade the inconvenience for a very low-priced house. 

As most know we now have alternative valuation using BPOs.  BPOs however, are not seen as a replacement to Appraisals, yet appraisers contend they are the valuation experts; the Realtors assert that when it comes to short sale valuations, BPOs could very well be the best option out there to determine an immediate sales price.

Read the whole story @ http://tinyurl.com/37hdvc5

The FDIC has recognized the use of BPOs to establish loan-to-value ratios as part of its Loss Sharing Proposal to Promote Affordable Loan Modifications and the Federal Reserve Board has adopted BPOs as part of its Homeownership Preservation Policy for Residential Mortgage Assets.

Using a standard like the National Valuation Standards Institute by which Banks, Asset Management Companies, and Real Estate Agents & Brokers value properties creates legitimacy and could bring control to the market as all the parties involved in the transaction would gain confidence the assets are being priced appropriately and out‐of‐control depreciation would be curbed.

To file a complaint or to get free information on fraud and other consumer issues, contact the Federal Trade Commission at www.ftc.gov/consumerprotection or 877-FTC-HELP (4357).

The Mortgage Asset Research Institute found in 2009 that while overall loan frauds rose by 7 percent, the incidence of frauds involving property valuations increased by 50 percent.  

Whether you are a homeowner, agent or appraiser we all need the fraudsters to FEAR retribution from the ethical honest "real estate industry professionals".

Michael S. Richardson

Director/Chief Quality Officer
Author of "An American Epidemic, Mortgage Fraud a Serious Business"


Follow me on Twitter @ FocusonFraud


Comments (1)

Richard Glesser
North Country Appraisal Services - Gaylord, MI

The delay in short sales truly has nothing to do with poor appraisal turn-around; but rather on the many delays and obstacles put up by the lenders in attempts to avoid short sales.  It is more than apparent that they prefer foreclosure.  A second delay is due to HVCC which has been mandated by the government resulting in the appraisal process controlled by middlemen in the form of AMCs.  They hire they cheapest appraisers available and actually delay the process with their internal reviews and quality control.  Appraisals I submit to AMCs typically are in their quality control departments nearly a week after the report was completed and submitted.  Finally, it is only a matter of time before Realtors performing BPOs will come under the same reviewer and underwriter scrutiny that appraisers have dealt with for years.  At that point, the pittance they want to pay will become glaringly too little.  The move to have BPOs rather than appraisals is just another ploy by the lenders to reduce their costs and increase their profits and has nothing whatsoever to do with timeliness.

May 28, 2010 04:55 PM