Need Help to Fight Ridiculously Undervalued BPO. Please! (RE agent, incentive, square footage)
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I applied to cancel PMI from my home loan with Provident Funding. They ordered a BPO and a RE agent walked through our property on Wednesday, taking photos. Today I received the BPO and am astonished about how far away a BPO can be from fair market value, obviously in favor of the lender. I think the lender fat cats want to really take out the families in our community and steal the money away that we so need right here in this economy. If that means to make a travesty out of a fair and just process so be it.
How can I best fight this best (Congressman/Senator, 3 on your side, ...)?
These are the facts:
My home is in zip code 85024 (Deer Valley), built 1986.
-The BPO states there is an "abundance of available properties" and they state 15 active properties. Is this abundant? Of the 15, 5 meet criteria of similar age (1982-1990). Abundant?
-The BPO states values are declining. Really? Has he ever read the monthly ASU Real Estate Market Report showing 16.5% appreciation per sf in April y-o-y?
- The sold comp was sold Jan. 25. Obviously, we had very strong appreciation since then. Sold is 66.4/sf. A house 50 yards away (same year, same builder) from ours closed two weeks ago at 85.5/sf. That was before the BPO was made.
- The current competitive listing comp is 102.11/sf and for whatever reason called "overpriced". Apparently, this statement is enough to give our house a final valuation of 69.5/sf. Yeah, right. The 5 active listings in zip 85024 in the same age range are from 88/sf to 138/sf.
By choosing a sold comp from 5 months back and leaving out 5 months of appreciation and then calling the current active listing "overpriced", you can distort the facts sufficiently to come up with any price whatsoever meets your purpose to screw the consumer. This is such a blatant lie, Madoff must have been involved somehow.
Well, I still believe this is the country of Liberty and Justice for All. This is what I'm going to fight for now. If you can give me any help, I would really appreciate it.
Thanks, PL
Last edited by Potential_Landlord; 06-18-2012 at 09:48 PM..
Pay for a real appraisal. A bpo is worthless, agents aren't appraisers. I can't believe your lender would even look at a bpo.
I also live in 85024, and valuing property there isn't easy - there are single-wide mobiles and $2 million homes within sight of each other - neighborhoods are *very* important. Stale comps don't help. I closed on a rental in 85024 in February @ $63 per sq ft, but I wrote the offer a year prior to that (short-sale). Current comps in that particular neighborhood are closer to $90 per sq foot, but there aren't any for sale, they're all pending.
If it were me, I might hold off for a few months & then have a real appraisal done, the appraiser will have more sold comps to go on, right now, there are still a few short-sale pending @ under true market value, just because the banks take so long to process them. I suspect you'll have some $100 per-square foot solds over the next couple of months. $69 per square foot was nice while it lasted...
I'd certainly watch a news program that covered a story like that. A consumer advocate would be nuts not to cover a story like that. People love to hate the banks. Give the viewers a story like that to chew on.
Pay for a real appraisal. A bpo is worthless, agents aren't appraisers. I can't believe your lender would even look at a bpo.
I also live in 85024, and valuing property there isn't easy - there are single-wide mobiles and $2 million homes within sight of each other - neighborhoods are *very* important. Stale comps don't help. I closed on a rental in 85024 in February @ $63 per sq ft, but I wrote the offer a year prior to that (short-sale). Current comps in that particular neighborhood are closer to $90 per sq foot, but there aren't any for sale, they're all pending.
If it were me, I might hold off for a few months & then have a real appraisal done, the appraiser will have more sold comps to go on, right now, there are still a few short-sale pending @ under true market value, just because the banks take so long to process them. I suspect you'll have some $100 per-square foot solds over the next couple of months. $69 per square foot was nice while it lasted...
zippyman: Thanks for your insightful comment. Can I ask you in a couple of months or so when a good time would be?
I'd certainly watch a news program that covered a story like that. A consumer advocate would be nuts not to cover a story like that. People love to hate the banks. Give the viewers a story like that to chew on.
Yeah, good idea. I will contact 3 on your side with this... screaming injustice.
Location: Mokelumne Hill, CA & El Pescadero, BCS MX.
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As someone who is called upon from time to time to do BPOs, I can only say that lenders and brokers are usually separated by a company that actually orders the BPO. I've never had a lender contact me directly nor been directed to give a low or high estimate of value.
As for your specifics, I'm seeing on Zillow (OK I said it, I looked at Zillow's sold properties in your zip code in the past 90 days) shows a total of 94 homes. It's hard to tell how many of these are comparables to your home, but if I pick one from the midrange and look at the value of their "Zestimates" (I hate those things, but it's the only data I can use) it shows maybe a 10% increase in value over the last 6 months in your zip code. Nice to see that anyway.
You mention several times comps of a similar age and while that certainly is one factor in determining value, it is by no means the only one. You list a home at $85.5 psf and then show a home at $102 psf as a competitive comp (or at least the broker did) I would think that anything over $95 psf (10%) I would also categorize as overpriced as well. Active listings are an indication of the competition in the market and even though you show a range from $88 to $133, again you use the age of the homes only and not the square footage, number of bedrooms, garage, or any other factors.
All that being said, as zippyman suggested, I would contact the lender again and offer to pay for an appraisal rather than a BPO. Closed sales are the best indicator of value and in your area it looks as if there are plenty of them in the past 90 days to give an appraiser plenty of data to establish value. I would question any comp that falls outside of the 90 day window.
Is there a conspiracy here? I think not. Is there a poor quality BPO? Looks like it.
As someone who is called upon from time to time to do BPOs, I can only say that lenders and brokers are usually separated by a company that actually orders the BPO. I've never had a lender contact me directly nor been directed to give a low or high estimate of value.
As for your specifics, I'm seeing on Zillow (OK I said it, I looked at Zillow's sold properties in your zip code in the past 90 days) shows a total of 94 homes. It's hard to tell how many of these are comparables to your home, but if I pick one from the midrange and look at the value of their "Zestimates" (I hate those things, but it's the only data I can use) it shows maybe a 10% increase in value over the last 6 months in your zip code. Nice to see that anyway.
You mention several times comps of a similar age and while that certainly is one factor in determining value, it is by no means the only one. You list a home at $85.5 psf and then show a home at $102 psf as a competitive comp (or at least the broker did) I would think that anything over $95 psf (10%) I would also categorize as overpriced as well. Active listings are an indication of the competition in the market and even though you show a range from $88 to $133, again you use the age of the homes only and not the square footage, number of bedrooms, garage, or any other factors.
All that being said, as zippyman suggested, I would contact the lender again and offer to pay for an appraisal rather than a BPO. Closed sales are the best indicator of value and in your area it looks as if there are plenty of them in the past 90 days to give an appraiser plenty of data to establish value. I would question any comp that falls outside of the 90 day window.
Is there a conspiracy here? I think not. Is there a poor quality BPO? Looks like it.
Best of luck in getting your PMI eliminated.
Thanks for weighing in with your expertise. I agree to your conclusion - not probably a conspiracy, but a very poor quality BPO. Apparently, I have to go the apparisal route. However, something has to be done about the PMI elimination process as it seems to be systematically tilted against the consumer by relying on BPOs underestimating property value.
Thanks for weighing in with your expertise. I agree to your conclusion - not probably a conspiracy, but a very poor quality BPO. Apparently, I have to go the apparisal route. However, something has to be done about the PMI elimination process as it seems to be systematically tilted against the consumer by relying on BPOs underestimating property value.
What number(PSF) do you have to come in at to get rid of the PMI?
Thanks for weighing in with your expertise. I agree to your conclusion - not probably a conspiracy, but a very poor quality BPO. Apparently, I have to go the apparisal route. However, something has to be done about the PMI elimination process as it seems to be systematically tilted against the consumer by relying on BPOs underestimating property value.
Theres no incentive for the bank to remove the pmi, and penalties for the bank if they do it too soon, so you can understand why they're in no hurry to get rid of your pmi. That said, I've never heard of using a bpo to remove pmi, it sounds odd, and hard to support if the loan later defaults.
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