How Many BPOs Does a Bank Need To Order on a Short Sale?

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Real Estate Agent with Long and Foster REALTORS®, Gainesville, VA VA License # 0225089470

How Many BPOs Does a Bank Need To Order on a Short Sale?

I am really at my wit's end when it comes to banks and BPOs at the moment.  In two separate Short Sales, each with different banks, my sellers and I seem to be stuck on the BPO hampster wheel.  

The first is really ponderous.  It's a Bank of America Cooperative Short Sale.  In these sales, Bank of America orders an appraisal or BPO early to establish their net sales price.  That's what is supposed to make Bank of America Cooperative Short Sales so easy to deal with.  They find out what the property is worth and what they want of that value up front.   Done!  Contract in that meets that value.  Check!  Second trust, tied to the first Bank of America loan has private mortgage insurance and insists the seller pay back the remaining second trust debt.  Sellers says okay.  Check.  Then what?  You guess it...order another BPO.  

WHY?  Why do they need to know the value.  The buyer has agreed to up the price from the first BPO.  The seller has agreed to pay off the second.  What is the point?

The second is just an exercise in Short Sale futility.  Aurora Loan Servicing had been the first trust of a Short Sale that started in early spring.  In last spring, after all the docs were collected and values established on the bank's behalf, the loan was sold to NationStar.  My heart jumped up in my throat, but my Aurora rep told me that this would NOT affect the Short Sale approval time frame.  NationStar's orders were to pick up the docs, review them and decision the file.  You already know that's NOT what happened.

NationStar ordered a BPO.  Fine.  Done.  Then, they wanted a second independent evaluation of value.  In all their wisdom, they sent me a blank BPO form and asked me to do this independent evaluation of value. Does that confuse every else out there as much as it did me?  I can't be objective.  I'm the Listing Agent.  I clarified the instructions.  Sure enough, NationStar wanted ME to do the second BPO.  Okay.  Here's come the report that shows the value I NEED it to be for you to accept the contract.

All of these BPOs seem nonsensical to me.  One and done is what I've been living with since 2007.  Oh well.  Apparently the answer to the question of how many BPOs a bank needs to order on a Short Sale is one I can not answer.  I can tell you that a cat can have thirteen teeth extracted in one day and still have enough to chew food.  Yeah. That's good news for a Short Sale Agent whose transactions can't seem to get to the closing table without just one more BPO.  I don't want to tell what having thirteen teeth getting extracted costs.  Thank goodness we have pet insurance.  Unlike private mortgage insurance companies, they actually pay out on claims.

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Topic:
Home Selling
Location:
Virginia Prince William County
Groups:
Short Sales Specialists
Short Sale REALTORS®
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Tags:
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Ambassador
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Richard Weisser
Richard Weisser Realty - Newnan, GA
Richard Weisser Retired Real Estate Professional

Chris Ann...

Sometimes it gets so frustrating that you can't stand it. I recently has a second BPO that came in for a lot LESS that the purchase price.

That really sped things up!

Aug 31, 2012 09:57 PM #1
Rainmaker
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Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

Good Morning Chris Ann, Sometimes 2 and 1 formal appraisal is what i have been seeing. There does not seem to be a rhyme or reason but I do alot of BPOs for them and have asked and been studying the process. It seems when the bpo doesnt match the original appraisal or the bpo is not in line with the new and top secret "collateral risk processor" they will order another bpo. Have a great Saturday.

Aug 31, 2012 11:55 PM #2
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Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

Richard:  I would imagine so.  The one I did showed values declining as well.  Maybe it will light a fire.

Scott:  When the deal is practically signed off on, why order another?  That's the first scenario and one that blows me away.

Sep 01, 2012 02:35 AM #3
Rainer
82,850
Jim McNinch
Trademark Loss Mitigation - Spring, TX
Short Sale Specialist, Texas

I have found in more than a few cases, that FANNIE MAE will sometimes order another BPO if they have an issue with the lender's BPO.  It is often done through the lender so it seems like the lender is re-ordering.

Either way, one or multiple, they are more often inaccurate. 

Sep 01, 2012 03:07 AM #4
Rainmaker
1,560,731
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

How many banks does it take to screw in a BPO light blub?!?  D'uh.  The BPO hamster wheel, classic!

Sep 01, 2012 05:17 AM #5
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Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

Jim:  I just don't get the multiple BPOs in these instances.  Makes no sense in either scenario.

Carla:  It's just another day in Short Sales.  

Sep 01, 2012 08:02 AM #6
Rainmaker
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Elizabeth Weintraub Sacramento Realtor Top 1%
RE/MAX Gold - Sacramento, CA
Put 40 years of experience to work for you

Holy crap, I feel your pain. 13 teeth extracted? My cat had 8 and another 6 in a second appointment. But not until they performed an ultrasound, took X-rays and spent all kinds of my money in different ways when I continued to tell them I thought his teeth hurt to chew. But do they listen to me? Nope, just like those banks and their countless BPOs. BTW, I was fortunate to close an Aurora short sale after NationStar bought them without running through NationStar. Just lucky.

Sep 03, 2012 12:40 AM #7
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Chris Ann Cleland
Long and Foster REALTORS®, Gainesville, VA - Bristow, VA
Associate Broker, Bristow, VA

Elizabeth:  Why listen to the person who knows best, like the pet owner?  Thank goodness your Aurora Short Sale closed without having to deal with NationStar.  I've dealt with the latter before and they weren't that bad...when it was their loan from the beginning of the process.  I think we are in the middle of the great tidal wave of Short Sale files in progress that came from Aurora.  Too far down to not be affected.

Sep 03, 2012 04:06 AM #8
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Chris Ann Cleland

Associate Broker, Bristow, VA
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