Blind Squirrel and Acorns

[Elliott]

VP of Loss Mitigation (a very smart guy with 30 years experience)

So what metric does a VP of Loss Mitigation use to judge the correctness of valuation? A correlation between BPOs and actual sales price may be high, but that doesn't mean its a meaningful correlation, other than keeping him in his job.

 

[Terrel L. Shields]

I find it disappointing that a BPO is used to vet an appraiser under any circumstance.

The difference in the appraisal and the BPO was $280,000 and $425,000. It sold 2 years later for $260,000. Which do you think was the appraisal and which was the BPO. The first Realtor nudged it down to $325,000 without a sale. Finally a new Realtor priced it at $265,000 and it sold 60 days later.

And who got their a** eat for a year for "under-valuing" the property? It wasn't the Realtor. And being the genteel and tactful sort I am, who reminded someone what it really brought?

 

[Mr Rex]

The key factor may be the instructions from the lender. I often get REO assignments that say not to use REO comps, unless only REO comps are available or some similar verbiage. These are markets where the REO "stigma" is 50% or more but are not the only comps available, but if listed as REO, will carry the stigma and the heavy discount. So you are damned if you do, damned if you don't. Follow the client instructions and provide a value that is in the dream world that they predicate via SOW, or provide a value that the property will actually bring. If I was the RE agent, I'm pretty sure I could closely match my opinion with the sales price since I am controlling the transaction, any moron could see how easy that would be to work...

 

[Renee Healion]

The key factor may be the instructions from the lender. I often get REO assignments that say not to use REO comps, unless only REO comps are available or some similar verbiage. These are markets where the REO "stigma" is 50% or more but are not the only comps available, but if listed as REO, will carry the stigma and the heavy discount. So you are damned if you do, damned if you don't. Follow the client instructions and provide a value that is in the dream world that they predicate via SOW, or provide a value that the property will actually bring. If I was the RE agent, I'm pretty sure I could closely match my opinion with the sales price since I am controlling the transaction, any moron could see how easy that would be to work...

Exactly so. I see foreclosure cases come through with the value by the plaintiff's appraiser tending to almost always track higher than the court-appointed appraiser. I read that to mean the lender or their agent AMC were interfering in the comp selection.

And then I notice in the same record that the plaintiff appraisal is fee is 30% or more lighter than the court-appointed appraiser fee for work which has no interference and is approved by the judge.