Corruption in the REO area has been rampant. The thing is, appraisals are ordered when required by law, but the companies disregard regularly and the sales team set the price. In the past, Reo sales incentives and relationships with investors drive the price more than appraisals. But an even bigger secret is that values for properties in those bulk sales for the MBS/ABS markets are set by the trade desk–in the past they could actually override the number in the system. Definitely a little Enron-y.
