Sep 07 2010
Proposal Greater Than BPO Equals Everbody Wins?
A couple weeks ago, we aired an installment about disputing BPO’s. Kevin had an exciting little happening at one of our favorite banks that relates to BPO’s. A package was setup and assigned to a processor at Wells Fargo. They asked for some extra documentation, which were 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 duplicate of the BPO. Knowing the BPO now, all of the documents are taken care of and Kevin was expecting approval. Yet, the negotiator at the lender tells Kevin that the bid isn’t high enough. Here is the interesting part. The bid 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 residence is $49,900. The other values on the BPO are the swift sale value of $40,000 and the completely repaired value is $52,200. However, with a repaired value, someone will have to put cash into the property.
All of these values are in line with Kevin’s bid. Yet, the negotiator still says that the bid needs to be higher. Kevin replied by telling her that the bid is greater than the BPO and we already know what the BPO value is. The negotiator didn’t even recognize 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 furious. This is occuring too often. The media would have you think that banks want to help property owners avoid foreclosure. Nevertheless, this undoubtedly shows that negotiators are asking for higher offers without a BPO that justifies the demand for a higher proposal.
Why don’t the banks take the offer that meets their guidelines? Accept the proposal and move on. Even if it does not 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 bid and they need to work hard to figure out the BPO. Banks need to empower their staff to think. Set up a system where agents don’t need to escalate. Agree to the deals and move on.
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