What Lenders Do
Case 2
They Want to Net More Than The Appraisal

The seller refinanced for $360,000.  Offer comes in at $230,000.  Bank orders a Broker Price Opinion which comes in around $210,000.  After a couple of months of silence from the lender, buyer drops out.  One month later, buyer comes back in at $200,000.  That same day, lender calls to respond to the first offer and states "Don't bother submitting anything less than $260,000."

Does this make sense?  Let's do the math.  BPO is at $210,000.  The CDS estimated 20% payout on the original loan is $72,000 for a grand total of $282,000.  I guess this lender was "working" with us and discounted the price minimum to $260,000.  The problem is it would never appraise for this amount and after several months of waiting in a down market, the value is probably LESS than $200,000.  And let's not forget, when they "sell it" for less than $200,000, they will have a deficiency which they will chase or just sell to some collection agency for at least $160,000.  A nice "workout" that only benefits the bank. Nice!

READ CASE 3>>>