A few weeks ago, we aired an episode about disputing BPO's. Kevin had an interesting little incident at one of our favorite banks that relates to BPO's. A file was setup and assigned to a processor at Wells Fargo. They asked for some additional documentation, which was provided. Then, Kevin asked what the BPO value was. What happened next was a bit out of the ordinary.
The negotiator at Wells Fargo emailed Kevin an actual copy of the BPO. Knowing the BPO now, all of the documents are taken care of and Kevin was expecting approval. However, the negotiator at the bank tells Kevin that the offer isn't high enough. Here is the interesting part. The offer was for $50,500 and the BPO is lower. There are actually three values on a BPO, but the only one that matters is the "as is" value. The "as is" value of this home is $49,900. The other values on the BPO are the quick sale value of $40,000 and the fully repaired value is $52,200. However, with a repaired value, somebody will have to put money into the home.
All of these values are in line with Kevin's offer. However, the negotiator still says that the offer needs to be higher. Kevin responded by telling her that the offer is greater than the BPO and we already know what the BPO value is. The negotiator didn't even realize that we had the BPO, despite the fact that we sent her the BPO in the email with the offer.
The fact that the offer isn't good enough, even though it is higher than the BPO, just makes us mad. This is happening too often. The media would have you believe that banks want to help home owners avoid foreclosure. However, this clearly shows that negotiators are asking for higher offers without a BPO that justifies the request for a higher offer.
Why don't the banks take the offer that meets their guidelines? Accept the offer and move on. Even if it doesn't meet the guidelines, it is much better than foreclosure. It doesn't help the home owner and it doesn't help the bank mitigate loss.
Agents need to be confident in the value of their offer and they need to work hard to figure out the BPO. Banks need to empower their employees to think. Set up a system where agents don't need to escalate. Approve the deals and move on.
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