Roseville California - GMAC mortgage servicing a government owned Fannie Mae loan, this week turned down a market bid of $250,000 for a short sale and instead they became the new owner of another California home, by bidding over $313,000 at a trustee sale. This will result in added operating expenses, management, and other costs as they begin to market the house. The house had already been on the market for 60 days with a starting price of $279,000 and a highest market bid $250,000. GMAC had details about the property, marketing, current market conditions, but they bought the house anyway? They ignored information and reports from professional short sale experts, including a lawyer and real estate broker. WHY? Lenders buy a third party opinion of value. known as a "BPO" - a broker price opinion -. The BPO is a local summary of information and opinions from a local real eststate agent. The lender will only pay $40 to $75 to obtain this report. From this report they derives their data which will dictate their decisions about foreclosure, loan modification, or short sale. They do not share their this opinion during any negotiaions with home owners or other professionals during negotiaions, causing asset managers to make many bad decisions. This property will be sold by the lender as an "REO", - real estate owned -. The lender will hire a new agent that may be the agent who did the BPO report. The company that was selling the property loses their contract. Final result ? Waste. Taxpayers pay the losses. The short sale seller, wasted effor, t. GMAC wins because they are paid service fees no matter how they mismanage. The BPO agent may win a contract to sell the house. The short sale broker loses their time and expenses.
PS Wachovia recently shared in a seminar some local statics showing short sales had produced 25% or more in net savings to the lender and borrowe,r as compared to the foreclosed bank owned sales.
Published by - Mike Jaeger Live -
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