When we are doing a BPO for a bank who is doing a loan modification on a property, what exactly does the bank ideally want to see from the report? (This is just out of curiosity on my part). Do they want the house to come in close to the amount of the loan, or do they want to see that the value is lower? Your thoughts?

They probably just want a broker’s price opinion for the home.

And in my opinion the reason for a report does not change the value of a home.

Of course, but that is not my question.

I think REOBOSS did answer your question. I do not look at what is owed on the home. I give my opinion on the value of the home. What is owed is regardless as to the true value, especially today.

I don't know if I worded my post wrong or people are just assuming that this is in reference to a BPO that I am completing. As I stated in my post, this is just out of curiosity on my part.

I would like to do a loan mod on my home, but my home is worth more than the loan. I am wondering if the bank would not want to do it because they would say that I could just sell. Perhaps they would be more likely to do a mod on a property that is worth less than the amount owned. In that case they would rather get the full amount at a lower rate than have it sell via a Short Sale. I just though folks here may have more input.

I'd like to have some idea of the chance before I spend a lot of time on the process, as I am also considering selling.

Just my opinion but I believe they want the actual value that the property could be sold for. Have a hard time believing they would approve a loan mod for a property with much, if any, true equity.

I can see a loan mod going through even though the loan is less than true market value. If you try to ask for a principal reduction that probably wont work out, but if they can adjust your payment with a reduced interest rate that could work. They will probably want to see proof as to why you cant afford your current payment and you can afford a reduced payment.

To answer your question the bank wants to see true market value, but I think the lower the bpo comes in the better of a chance the loan mod would be approved. Your best bet is to hire an attorney who specializes in this. In our con ed class a couple weeks ago the teacher brought in an attorney who went over the short sale process and loan mod process. I learned more in that class than all my con ed classes I have ever taken combined.

from what I just experienced with my loan this past month...I suspect perhaps...they will gladly do a loan mod for you...my lender approched me...with a rate I could not refuse...after it was all said and done...I strongly believe they will use this "refi" as a "loan Mod" # to add to the "fact" that they are modifing loans per goverment regulations...something was said by the closer that made me suspicious...something to the effect that the bank was helping us out...I dont know...I just feel a little used...we really didnt need "help"...

I wish it was always that easy. I have been trying to do a loan mod for myself and I am just not having any luck being self employed.

Banks do not want to do loan mods! They make more on foreclosures especially if they're just servicing the loan.
In some cases are using the loan mod paperwork to accelerate foreclosures. Instead make them prove they hold the note. Make sure assignments where properly filed every time the loan was sold.

If they ask for fair market value, that is what I give them. If property looks "not too well kept" as many of them do, I lower value a little.