Category: BPO Industry

Information pertaining to the BPO Industry

Refinances fueling increase in BPO volume

Refinances fueling BPO industry

Refinance

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.

IncreaseThe 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

Real Estate IncomeThe 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:

ForeclosureREO/ForeclosuresAdditionally, 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.

Pricing skills are Apex real Estate Skills:

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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Who is a BPO Customer?

Who is a BPO customer?

BPO customersAnyone who would like an accurate house or real estate price estimate. Anyone can order a BPO. Homeowners can request a free BPO from a C-REPS for any reason when making financial decisions. The most common reason is determining a selling price when listing their house for sale. C-REPS are willing to do a free BPO in order to gain clients and obtain listings.

BPOs are just as accurate as appraisals and, in certain cases, even more accurate. How could a BPO possibly be more accurate than an appraisal? Agents and brokers interact with home buyers as a significant part of their daily work routine. Agents and brokers know the mindset of home buyers. Knowing what a buyer is willing to pay for anything is the most critical component of any appraisal. C-REPS are BPO certified agents and brokers trained in the proper procedures to perform accurate valuations. The combination of proper valuation training and knowing the mindset of real estate buyers will produce the most accurate valuation possible.

 

BPO CustomerThe overwhelming majority of BPO customers are in the mortgage and lending industry: Banks, Lenders, Mortgage Servicers, Asset managers, Appraisal Management Companies, AMCs, and BPO Companies, to name a few. Government entities such as Freddie Mac, Fannie Mae, FDIC, GSA, etc. also utilize BPOs. These organizations order thousands of BPOs every day across the country. These organizations need the vital information in a BPO to make financial decisions.

    The mortgage industry can be broken into three main categories:

  • Default (REO, Foreclosures, Short Sales)Foreclosure
  • Servicing (re-finance, PMI, HELOC)
  • Originations (home purchases)

The default mortgage industry essentially invented the BPO to make financial decisions and the mortgage service industry followed. The mortgage origination industry has limited use of BPOs due to rules and regulations imposed on the lending industry.

BPOs are also finding their way into legal proceedings. Progressive judges and attorneys are starting to utilize BPOs (vs appraisals) to build cases and as evidence in court cases. C-REPS can be hired as expert witnesses as well.

What is a BPO Company?

BPO Companies can be both a BPO customer and a BPO provider. To a C-REPS, the BPO company is the customer. A C-REPS is an individual BPO vendor to a BPO company. A BPO company has tens of thousands of agents and brokers as BPO vendors. A BPO company, in turn, is a BPO vendor to the mortgage industry (dealing in the thousands).

Who is a BPO Customer Page