Home Buying in 60030>Question Details

Jfinsup1, Home Buyer in 60030

As a short sale buyer - do I have a right to know the results of the bpo?

Asked by Jfinsup1, 60030 Thu Aug 26, 2010

I have made an offer on a short sale - I have been assigned a negotiator and had a bpo over a week and a half ago. I have still not heard anything as expected. Do I have a right to know what the results of the bpo are?

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John Walin’s answer
Hi
In short sale situations in Lake County, I have seen where the listing agent sets an artificially low asking price to get offers, and then after an offer comes in, bank orders a distressed BPO appraisal and the bank counters with a higher number than original asking price. Unless of course, the short sale house is pre-approved at the asking price. You have no right to know the basis of their counter offer or approval process. If the house is pre-approved at the asking price, going in close to that number is the best way to know where you stand quicker. The banks have a sophisticated non emotional model and it is a committee decision.

A lot of short sales stall or fall apart because of the seller's attorney trying to get a zero deficiency satisfaction letter from the bank. There are two things the bank has to approve. First the release letter to permit the short sale to take place and 2nd, the satisfaction letter to take less than what the short amount actually is. Often the bank will want 50% of the shortage repaid over ten years in a non collateralized loan and the seller attorney is trying to get the seller 100% Scot free of the deficiency.

Many times I think banks are blamed unfairly about response time, when in fact the seller doesn't have a legitimate hardship or is unwilling to carry forward any of the shortage. Remember, the bank is doing the seller a favor in agreeing to allow a short sale to take place and to take less than what is owed!

You do have a right to know what the seller's hardship is and can ask for a copy of the hardship letter given to the bank. Also, a local attorney can run a pro-forma title policy to figure out how big is the deficiency. Attorney's are title company agents and can run a "free" title search for you. If it is a big number the bank might just let it go to foreclosure and you are wasting your time.

Call me if you care to discuss further
847 276-0120
0 votes Thank Flag Link Fri Feb 4, 2011
Hi Jfinsup1-
Are you asking your agent for this information?
Technically, you will not know which BPO or appraisal is being done or when, until it's over. But, if the listing agent is contacting the banks regularly, and your agent, asks for the information, the Listing agent should be able to supply that information to you, because they should know where the short sale is in the process, and whether or not there is a counter on the table. But, technically, since you did not pay for it, you should not have access to that information. And the banks may not issue that information.
May I ask who's expectation it was to have an answer yet? You can always ask for status, so that you know where you are in the process, but whether or not the banks will let you know price points is a matter of standard operating procedure for the bank.
0 votes Thank Flag Link Thu Dec 9, 2010
You could pay for your own appraisal, but it's the lender's proprietary information, so no.
0 votes Thank Flag Link Wed Oct 6, 2010
No you do not have any rights to the BPO for all the reasons you have recieved here already. But don't feel left out, the listing agent, the homeowner and even the attorney who represents the seller not entitled to this information either.
0 votes Thank Flag Link Thu Sep 30, 2010
100% NO.

As long as your short sale is approved, your value should be irrelevent to you. What would be relevent is your appraisal value from your appraisal in connection with your mortgage.
0 votes Thank Flag Link Sat Sep 18, 2010
No because the BPO is not for your information - it is for the lender. The lender ordered it - correct? Paid for it- correct? Your agent should have done a market for you to make up an educated offer- right?
Web Reference: http://topbrainerdagent.com
0 votes Thank Flag Link Sat Aug 28, 2010
You will find out what the BPO was if it came back a lot higher than your offer as I have had banks counter offer with a higher price. As others stated it doesn't matter what price the BPO came in at as your lender will order an appraisal on your behalf. The appraisal your lender orders is available to you as you are the one paying for it. After your appraisal is complete as your loan officer for a copy.

Good Luck!
0 votes Thank Flag Link Sat Aug 28, 2010
You don't, simply because you didn't pay for it. The lender ordered and paid for it.
0 votes Thank Flag Link Fri Aug 27, 2010
It's doubtful you'll hear anything back on the bpo. A 2d value is always ordered to keep everybody honest and to leave a paper trail for the loan's investor on the secondary market. If there is too much disparity, beyond what their matrix allows, another value will be ordered as well, but you and your realtor know from comps whether or not your offer is in line for that type home in that area.

If your offer was reasonably close to list price (95-97%), and the comps you have sold in the general range of your offer, it's reasonable to assume it was now priced right . If there was a feeding frenzy with multiple offers, an independent bpo might show it was priced too low, but multiple offers also drive the price back up, often to the top (or more) of what the market will bear anyway.

In the end, it doesn't matter what the bpo came in at as long as the negotiator (and lender) can make their case as to why your offer will net more to the lender than a subsequent foreclosure.

There are any number of parameters the lenders need to meet before approving a short sale, but if a negotiator has been assigned to the loan, you're better off than most!
0 votes Thank Flag Link Thu Aug 26, 2010
Sorry to say, you really do not. The BPO is paid for by the lender for the sole purpose of getting an opinion on the value of the property so they can evaluate your offer and determine their response. If your offer is lower than the BPO they would probably tell you as justification for you to come up to the higher price. Often the company/bank you are negotiating with is not really the owner of the loan, but the servicer. They are a middleman between the loan owner and everyone else. This is one of the reasons short sales can take a long time.
0 votes Thank Flag Link Thu Aug 26, 2010
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