Cliff Salisbury
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Why not call the bank for you neighbor and get the requirements?
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Can Anyone Explain This?
- Thread starter RustNeverSleeps
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RustNeverSleeps
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You lost me Jim.
Lets say they bought the house for $100,000 and made $10,000 in improvements. If the appraiser determines cost = value then its $110k.
Market value is $100,000 x 40% increase = $140,000
BPO would get the PMI removed but not the appraisal.
It makes no sense.
Lets say they bought the house for $100,000 and made $10,000 in improvements. If the appraiser determines cost = value then its $110k.
Market value is $100,000 x 40% increase = $140,000
BPO would get the PMI removed but not the appraisal.
It makes no sense.
Maybe the original information is not entirely accurate.
JSmith43
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Bone up on the topic a bit:
http://www.ftc.gov/bcp/conline/pubs/alerts/pmialrt.shtm
My guess is that it is a B/C loan, the guy has been late on his payments, something like that. So the servicer is punishing him by steering him toward a BPO
http://www.ftc.gov/bcp/conline/pubs/alerts/pmialrt.shtm
My guess is that it is a B/C loan, the guy has been late on his payments, something like that. So the servicer is punishing him by steering him toward a BPO
Mztk1
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Ray, you are definately missing something.
It sounds like they have a statistical system they use to check the values. So if there are no improvements made to the property they can check the BPO against the data and feel comfortable with the 80/20. But if there were upgrades completed, and those upgrades are going to put the house over the top for PMI removal, there is no cost effective way they can check that with their inhouse review system so they make it a 75/25 LTV.
My gut says they can have a BPO or an appraisal done at 80/20, but if improvements were made and had to be figured into the value in order to reach the PMI removal mark, an appraisal MUST be done and they need a 75/25.
Just my guess. Otherwise, it doesn't make much sense.
In your neighbors case, if they don't need the improvements factored into the report to get it removed, which it sounds they wouldn't, they'd be better served by spending $150 on a BPO. I guess that BPO will be done by a lender approved agent and the agent will keep $45.
It sounds like they have a statistical system they use to check the values. So if there are no improvements made to the property they can check the BPO against the data and feel comfortable with the 80/20. But if there were upgrades completed, and those upgrades are going to put the house over the top for PMI removal, there is no cost effective way they can check that with their inhouse review system so they make it a 75/25 LTV.
My gut says they can have a BPO or an appraisal done at 80/20, but if improvements were made and had to be figured into the value in order to reach the PMI removal mark, an appraisal MUST be done and they need a 75/25.
Just my guess. Otherwise, it doesn't make much sense.
In your neighbors case, if they don't need the improvements factored into the report to get it removed, which it sounds they wouldn't, they'd be better served by spending $150 on a BPO. I guess that BPO will be done by a lender approved agent and the agent will keep $45.
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RustNeverSleeps
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Jim, that seems to be the only thing that makes sense.
Jason Barber
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I'm just waiting for Option 3: Charge the homeowner $500 for an AVM and the decision to remove PMI will be based on 85/15 LTV of current market value.
EVAUSA
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We talked about BPO's in my last USPAP class, I brought it up because I thought it might be a nice little side gig. The class and teachers census was, unless your a Broker, the appraiser is misrepresenting themselves by completing BPO. We can do something similar, but not on a BPO form. If an appraiser comes up with value, it is an appraisal, not a BPO.
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I don't think so. Banks/Lenders put more credence in whatever suits their needs. If that happens to be a BPO then as far as they're concerned a BPO is superior.
Pa'akai
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I've stated this in another thread so sorry for being redundant. I know an appraiser had performed a walk-in appraisal (1004) where the home was in contract. The interior of the home had been recently updated and remodeled and the sales price was at market value.
Lender then had a Realtor (with 2 months experience) perform an exterior BPO, which came in $10,000 under appraisers value and the purchase price. I know the Realtor because she works in my real estate office (I'm also a Realtor too). She had no clue on how to make adjustments, how to really even perform any type evaluation, and didn't even know what to look for when doing this type of work.
The lender accepted the BPO's valuation over the appraisers.
I know so many Realtors out here performing BPO's that have no clue to any type of basic valuation yet they are getting so much work, especially pre-foreclosure, that are setting prices for the lenders.
I stated in another thread how I bought a foreclosed house for $62,000 (I had it listed for $115,000 at one time the year before). The house was 1800 sf and although needing some updating, wasn't in that bad of shape. A few months later I was talking to a Realtor about the good deal I got and he stated that he did the BPO that set the price. He stated he thought it was a MH and about 1,200 sf. Not even close.
Hate to say it but most Realtors I know are morons when it comes to performing BPO's and the lenders are even bigger morons for accepting them. All to save a couple hundred dollars on an appraisal fee, they lose thousands, if not tens of thousands on these.
I've seen many BPO's by Realtors I know that aren't even close to a legitimate value and its mostly not a sometime thing, it mostly an all the time thing.
Lender then had a Realtor (with 2 months experience) perform an exterior BPO, which came in $10,000 under appraisers value and the purchase price. I know the Realtor because she works in my real estate office (I'm also a Realtor too). She had no clue on how to make adjustments, how to really even perform any type evaluation, and didn't even know what to look for when doing this type of work.
The lender accepted the BPO's valuation over the appraisers.
I know so many Realtors out here performing BPO's that have no clue to any type of basic valuation yet they are getting so much work, especially pre-foreclosure, that are setting prices for the lenders.
I stated in another thread how I bought a foreclosed house for $62,000 (I had it listed for $115,000 at one time the year before). The house was 1800 sf and although needing some updating, wasn't in that bad of shape. A few months later I was talking to a Realtor about the good deal I got and he stated that he did the BPO that set the price. He stated he thought it was a MH and about 1,200 sf. Not even close.
Hate to say it but most Realtors I know are morons when it comes to performing BPO's and the lenders are even bigger morons for accepting them. All to save a couple hundred dollars on an appraisal fee, they lose thousands, if not tens of thousands on these.
I've seen many BPO's by Realtors I know that aren't even close to a legitimate value and its mostly not a sometime thing, it mostly an all the time thing.
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