BPO Fraud & What You Need to Know

Oct. 4, 2011 - PRLog -- This is ridiculous...
Do you attend BPO's on your listings? Despite how much we plead, coax and cajole, we find in most cases that listing agents DO NOT ATTEND BPO's!

The number one reason given? "I'm just too busy." You may want to clear your calendar and make this a normal part of your listing protocol. Here's why...

Last week Ron did a favor for a high producing SSAP agent he has known for years. He was out of town and was unable to attend the BPO. If you have spoken to Ron about this subject, you know how emphatic he is about listing agents attending BPO's. Here's one example of why, in his words...

Ron's story...

"I attended an interior BPO today for one of our short sales and was accompanied by the buyer's agent. When the BPO agent arrived, he produced his business card which stated that he is an REO expert and stated that he does approximately 200 BPO's per month.

He didn't take pictures and barely walked the inside of the home. Even though I pointed out the fact that there was mold, he seemed uninterested and didn't take notes on the condition of the property. He also never walked around the outside of the home.

When he asked the offer price, I told him was $400K. I had seen the comps and knew the offer was very strong. He told me he would bring the value in higher than the offer price. Keep in mind that he lived in another county nearly an hour away, didn't take pictures, perform his own comp analysis, and never viewed either the interior or the exterior of the home. I was curious about how he arrived at this figure and knew it wouldn't sell for more. This is where it got interesting.

He told the buyer's agent and me 'If your client can't bring their offer price up, I know the investor who would buy it at auction, probably for about $300K. Your client can then purchase it from the investor for $400K.'

He then asked for my card so he could call me after the auction. To say I was shocked at such overt fraud of this magnitude is an understatement. However, when his BPO came in at $440K, I was anything BUT shocked."

To recap, this BPO agent:

Does 200 BPO's per month

Intentionally overinflated the value of the home to force it into foreclosure (hence his disinterest in inspecting the house in the first place)    

Planned to give the lead to an investor who would buy below market value and flip for a quick profit.

Will make money regardless! If it doesn't sell at auction, he gets the REO listing

Pretty good gig isn't it? I shudder to think of the impact this type of activity has had to the housing market, the economy and most importantly, families who were unnecessarily forced into foreclosure.

This individual has since been reported to the DRE and has been escalated to the Office of the President at Bank of America. We have learned this in more of a crime ring than a rogue individual. In other words, it's systemic.

What can you do? The answer should be obvious. PLEASE do your comp homework, attend the BPO, get the agents business card and hold them accountable to provide an accurate BPO. You'll find your short sale closes significantly faster if you do!

# # #

We are America's short sale processing leader. Cutting edge technology, as well as our daily research on the constant changes to policies regarding short sales nationwide, are how our result driven program has become so successful.