The lending industry has many uses for BPOs - distressed properties (foreclosures, REO, Short Sale etc), Home equity loans & lines of credit, and legal proceedings to name a few. Click here for a BPO Explanation
Other uses of BPOs is for due diligence - specifically in this article, for portfolio sales and/or purchase. An institution such as Fannie Mae may, in part, use BPOs to determine the selling price of a portfolio of homes. The buyer of the portfolio may use BPOs to determine a good bidding price or to determine if the selling price is reasonable for the portfolio. BPOs are performed on individual homes and then aggregated within the portfolio. This article points out some aggregated statistics which were garnered by using BPOs. Specifically in this article, the loan-to-value ratio.
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