Mortgage lenders order a BPO to get an estimate on the current value of the property or to compare it to the mortgage balance owed. The changes to the Nevada Foreclosure Mediation Program allows broker’s price opinion letters in lieu of appraisals.
There is concern of allowing the beneficiary of a deed of trust to submit a broker price opinion in place of an appraisal as part of mediation in the property valuation. So the borrower to the loan does not need to use professional appraisers to get the market value of real estate since agents and brokers can prepare bpo’s.
So lenders pay attention to loans where the appraised value in the property has appreciated prior to sale of foreclosures, repos and banked owned homes usually sell below market value.
After the financial package and hardship letter is received the mortgage lender will order a broker’s price opinion to find out what the property is actually worth. In order to do this the value of comparable properties in the same neighborhood are used along with the general condition of the neighborhood, along with the condition of the specific property in relation to neighboring houses in the current market.
Interestingly the lower the broker’s price opinion, the more likely the mortgage lender will approve a short sale. Other options are to get a short sale listing by contacting the loss mitigation department of the bank. so it is important to find out about the asset management. Reports show that the MLS gives the lender owned home along with who is representing it.
You are probably aware that the lenders will order a BPO or appraisal which could take from 30 to 60 days so to have success during a short sale process it is necessary to have good communication with the seller’s mortgage lender. Then once the Authorization to Release Information is filed, agents will be able to find out whether a short sale is possible.