Yip they sure are.
We the people have bailed out the banks to the tune of 700 Billion dollars and for what… Ahh yes, to help the foreclosures and to prevent homeowners losing homes.
So why are lenders still not facilitating short sales at a more productive and proficient rate?
Well this is how it works. .. In short of course.
Lender gets an offer for a property which is way overleveraged, so the offer is significantly lower than what is owed.
Banks ask for a short sale package to be completed and sent to them. Then comes the Not So Fun part…. The call a BPO (Brokers Price Opinion) or in some cases an appraisal.
At this point you need to be aware that this is where the challenges start.
A lender pays on average $30 - $50 for a BPO and most appraisals are at ½ price you would normally pay.
So the big question is, what incentive has a BPO or an Appraiser to make an accurate evaluation…. My experience None What so Ever.
It is as quick as they can get in and get out. Some BPO’s and Appraisers don’t even go into the house.
There is NO WAY anyone can be efficient enough to walk into 15 homes a day, take a note of all the challenges ( theses are mostly MIND notes as some don’t even bring in a pad to write on) take half a dozen pictures and moves onto his or her next one.
How can anyone possibly remember all the defects and price adjustments that have to be made if nothing is written down.
We have this exact challenge going on right now… 3 appraisals, using the same person and they wonder why the value hasn’t changed.
At the last appraisal our representative was there and the appraiser openly admitted “he didn’t realize how bad this house was since he had….. wait for it….. NEVER BEEN IN IT BEFORE !!!!!
So why has this person gone back to the lender and told them a value of $300k for a house he has never been in? More so why are banks allowing these appraisers to charge 3 times for an appraisal which has Never been carried out correctly.
And needless to say on his last appraisal guess what his value was….. You’ve got it…. $300k.
We approached the lender and told them not to send the same guy out.. he is ever going to make himself look like an idiot and produce a lower value.
Oh by the way… the buyer’s lender carried out and appraisal and the value was $228k … go figure.
We did ask the lender if they are hell bent on getting $300k for this house would THEY lend to the buyer…Their answer was NO, as the buyer’s appraisal was $228k.
So there you have it, banks take our money, don’t help homeowners by facilitating short sales, listening to the very people who helped create this mess with over valuing homes and we all sit and wonder why the housing market it on its knees.
In spite of overwhelming evidence to substantiate the buyers offer including current listing and sold comps, and appraisal, 3 Independent BPO’s, repair estimates for over $65,000 …….this lender (who will remain nameless for now) is still going on one persons opinion of the value…. Unreal !
I think it is about time there was an independent body created to oversee banks and see the exact reason they are not doing short sales to help homeowners… when they have been given $700 BILLION of our money to do so.
More later.
Steve M
