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Overseas contractors, armed with Google Earth and listing websites, are appraising homes in the U.S. by the thousands. This form of appraisal was actually banned by Congress in the wake of the financial crisis, but they don't apply to large investors (e.g. Blackstone). The issue is that debt holders may actually have less collateralized value than they believe.
The Securities and Exchange Commission is now looking into whether companies that rent out homes pushed for higher valuations on properties backing securities. People who perform BPOs don’t need much training or an appraisal license, and experts said the quality of BPOs has dropped since pricing fell from $50 or more per home to as little as $25. The process is often outsourced to contractors in India, according to the Journal.
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