You're not going to believe the BPO assignment I just got!

Last Wednesday I got in a new REO assignment. It was for a condo located in building 2 of the complex. I went to the complex to check for occupancy. I located building 1 and building 3. Sitting in between these buildings was a slab with a chain link fence around it. Building 2 had burned to the ground.

I noticed a sign on building 1 for a management office. Went to the office and discovered it was closed permanently. A sign in the door gave the management company contact information. There was also a 2 page letter taped to the door addressed to the owners of the units in the former building 2. The short of it was that soil tests had been conducted and that the soil would not support a 3 story building like the one that burned down. The management company and the architect were trying to figure out what to do about the situation. At this time they has no solution.

I took pictures of the slab and returned to my office. I sent an email explaining what I had found along with the pictures and a synopsis of the letter on the door and ask how they wanted to handle the situation.

I got a reply telling me that they would look into the situation and get back to me later in the afternoon.

2 days later I got an email telling me they were still trying to figure out what to do but to go ahead and report the property vacant which I did.

Their system then triggered a property condition report.

I waited for additional instructions.

Yesterday I sent an email explaining that the PCC was due and that if I did not act on it the system would penalize me and again asked how they wanted me to proceed.

Well, today I get an email instructing me to fill out the PCC as if were vacant land and then complete the BPO as if it were vacant land!

I've done a lot of BPO's on all kinds of properties but I've never been asked to do one on the value of the percentage ownership of the land on a condo that does not exist.

Last summer I had a request on 3 properties, new construction, in the same neighborhood. I have been doing a lot of REO's on new construction so I thought it would be a snap. The BPO company even sent a year old appraisal with the request showing a $225 value on each. I thought it would be an easy one.

But when I get to the subdivision I see about 10 houses, all vacant, windows open in most of them and debris everywhere. This was just a drive by BPO and I take my photos of the first 2 and move to the 3rd. I'm a nosey kind of guy, so after taking my street photos I walk up to the house where I noticed a mud line about 10 ft up the exterior wall. Hummmm

One of the back windows was open, so I look in to see that this house looked like it had been inside a washing machine. These houses (and most of the subdivision) had been in the historic floods of 2009 where we had 22" of rain in 24 hrs in the Atlanta area. This house had not been touched except for someone opening the windows. It was a total loss.

I go back to the first 2 to look into the windows and yep, they were flooded also. But these two had all the interior stripped out all the way to the framing. The exteriors on these two had been pressure washed and from the street you could not tell of the damage. So I included photos of the interiors, taken thru the windows and screens, and adjusted my values. Needless to say that they were not worth $225 any more!

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Comments

Ruth Kinnett March 24, 2011 at 5:10am

I, too, have had a similar experience. I was sent to do ao BPO on a home - one that I had done twice before, over a span of three years. Imagine my suprise when I drove up and the home was gone. I took photos and went back to the office, did some research and found that the gentleman (I use the term loosely) was in prison for fraud and after he had been put in prison - the home mysteriously burned to the ground. This was a $500K home. I had a horrible time convincing the "bank" that the home was no longer there. Eventually I wound up doing a vacant land BPO and of course was only worth a fraction of the original value.
Bettina Settles March 23, 2011 at 5:24am

Happens more often now due to cities taking legal measures to clean up the neighborhoods ….and personally I had one where the City demolished the house.

The house was inhabitable and condemned. Notice was given to the servicer. Servicer or servicer attorney did not contact the city but send a BPO to my personal office. I send the pictures of the vacant lot where the house used to be and gave them the city/court notifications and did a BPO on the vacant lot.
Steve Adkins March 12, 2011 at 4:51am

Last summer I had a request on 3 properties, new construction, in the same neighborhood. I have been doing a lot of REO's on new construction so I thought it would be a snap. The BPO company even sent a year old appraisal with the request showing a $225 value on each. I thought it would be an easy one.

But when I get to the subdivision I see about 10 houses, all vacant, windows open in most of them and debris everywhere. This was just a drive by BPO and I take my photos of the first 2 and move to the 3rd. I'm a nosey kind of guy, so after taking my street photos I walk up to the house where I noticed a mud line about 10 ft up the exterior wall. Hummmm

One of the back windows was open, so I look in to see that this house looked like it had been inside a washing machine. These houses (and most of the subdivision) had been in the historic floods of 2009 where we had 22" of rain in 24 hrs in the Atlanta area. This house had not been touched except for someone opening the windows. It was a total loss.

I go back to the first 2 to look into the windows and yep, they were flooded also. But these two had all the interior stripped out all the way to the framing. The exteriors on these two had been pressure washed and from the street you could not tell of the damage. So I included photos of the interiors, taken thru the windows and screens, and adjusted my values. Needless to say that they were not worth $225 any more!
Rebecca Giacobba, CDPE March 11, 2011 at 4:05am

I had one like this and it was actually an REO assignment. I send my runner out and he called from the field saying where is the house? It had burned down and was only a slab. I also did one way back when we were doing BPOS mainly for equity lines of credit. When I got to the house it was a big beautiful brick colonial and as I went to get the side views I noticed the entire back of the house was gone due to a fire! At least we get some good stories sometimes, it keeps out jobs interesting!
Jose Rivas (DGRA) CDPE, SFR March 11, 2011 at 3:01am

I had a similar situatino several times last year, I know they are difficult, because one, the land doesn't belong to the condo, but to the condo association, two even if you break the lot by all the units you will get a very small lot and it would be difficult to find comps.

The best think I can tell you, that is what I did and my clients were ok with that, was to use the condo GLA as the lot size, you might be able to find small lots, I had to expand my searches last year and I made comments about that too. I am sure your AM knows the difficulty of the situation and the investors too, We can't make miracles just do our best.

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