Bid Greater Than BPO Equals Everbody Wins?

A few weeks ago, we aired an installment about disputing BPO’s. Kevin had an interesting little event 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 supplementary documentation, which were provided. Then, Kevin asked what the BPO value was. What happened after that was a bit out of the ordinary.

The negotiator at Wells Fargo emailed Kevin an actual replica of the BPO. Knowing the BPO now, all of the documents are taken care of and Kevin was expecting approval. Nonetheless, the negotiator at the lender tells Kevin that the proposal is not high enough. Here is the interesting part. The bid was for $50,500 and the BPO is lower. There are in fact 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 fast sale value of $40,000 and the completely repaired value is $52,200. Yet, with a repaired value, someone will have to put money into the house.

All of these values are in line with Kevin’s proposal. Still, the negotiator still says that the bid needs to be higher. Kevin replied by telling her that the bid is larger than the BPO and we already know what the BPO value is. The negotiator did not even realize that we had the BPO, despite the fact that we sent her the BPO in the email with the bid.

The fact that the bid isn’t good enough, even though it is higher than the BPO, just makes us irate. This is happening too often. The media would have you believe that banks want to help residence owners avoid foreclosure. Nevertheless, this obviously shows that negotiators are asking for greater offers without a BPO that justifies the demand for a higher offer.

Why don’t the banks take the proposal that meets their guidelines? Take the bid and move on. Even if it does not meet the guidelines, it is much better than foreclosure. It does not help the home owner and it does not help the lender mitigate loss.

Realtors need to be confident in the value of their offer and they need to work hard to figure out the BPO. Banks need to allow their workers to think. Set up a system where realtors do not need to escalate. Approve the deals and move on.

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