Refinances fueling BPO industry
Banks and lenders pay real estate Agents and Brokers to perform Broker Price Opinions (BPO) as the valuation method for refinances and Home Equity Lines of Credit (HELOC).
Low-interest rates are causing a mortgage refinance boom as homeowners are taking advantage of lower house payments via refinancing.
The Mortgage Bankers Association is forecasting approximately $1.23 trillion in refinances which represents a 36% increase from last year.
The refinance boom is not expected to slow down as the Federal Reserve is expected to lower interest rates in the coming months.
BPO volume increase
The refinance boom is also fueling a boom in Broker Price Opinions (BPO). Banks and lenders have found BPOs as a great method for their valuation requirements on refinances and HELOCs (Home Equity Line of Credit). Agents and Brokers across the country are earning extra real estate income performing BPOs for refinances and HELOCs.
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REO/Foreclosures on the rise:
Additionally, REOs and Foreclosures are on the rise. Banks, lenders, and asset managers will order a BPO when a loan becomes delinquent and then order several BPOs throughout the REO/Foreclosure process. Asset managers use BPO performance, in part, to determine the Agent or Broker to list the property should it go to market.
Furthermore, traditional home purchasing is on a downward trend as REO/Foreclosures are rising. Performing BPOs and taking REO/Foreclosure listings will prove to be a safe haven for Agents and Brokers for some time.
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In addition to being paid to do valuation work for banks and lenders, Agents and Brokers also perform BPOs to gain valuable insights into their markets and to stay on top of their market.
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