DS News

68 Never has collateral value been more important for effectively measuring and mitigating mortgage risk. Consequently, a lot of attention has been paid to fee appraisers in this post-crash world. Arriving at a value by projecting an old sales price to a future date is no longer likely to produce an accurate result. Finding a better way to arrive at a quality result, however, has been problematic, though a number of large industry firms are working on this right now, in association with one of the industry's largest investors. Fannie Mae's new Collateral Underwriter tool is one example of how important the industry is taking this part of the business. ere has been less attention paid to how appraisers work with the other group of professionals our industry calls upon to estimate the value of real estate: the real estate brokers. It is an oversight that could cost our industry dearly. Unlike the appraisal industry, where multiple layers of oversight have resulted in a set of rules that govern the methods and reports used, BPO providers do not conform to a single standard. To provide the detailed information our industry requires to make good decisions today, we've had to go back to the table with the real estate industry and recreate the process and the reporting protocols for Broker Price Opinions (BPOs). e result is a surprisingly useful report that more servicers and real estate investors are using in their decision making processes. A NEW SET OF INDUSTRY NEEDS In the aftermath of the crash, neighborhoods across the country that had been growing both in terms of size and home value for years were decimated by rampant foreclosures. Even now, years after the crisis, there are still many communities where mortgage-free properties sit next to REO and market value for either property is not easily determined. Traditional BPO orders just asked the agent or broker what the property could be sold for, but it became apparent after the financial crisis that this question was not easy to answer. e industry needed some rationale that agents could use to help them determine value, especially in neighborhoods that had been plagued by short sales and foreclosures. At the very least, the industry needed a I N D U S T R Y I N S I G H T / R O N A H L E N S D O R F J R . A BETTER WAY TO REPORT COLLATERAL VALUE

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