If your home equity valuation company doesn’t offer multiple valuation solutions, then it may be time to reconsider who you’re doing business with. Today, the smartest institutions are using multiple home equity valuation solutions to meet differing loan risk profiles. Lending institutions should look for a partner that offers an array of products to meet their valuation needs, including:
- AVM-Derived Solutions —Automated Valuation Models (AVMs) and Interactive AVMs (iAVMs), use mathematical modeling and comparables to calculate a property’s value at a specific point in time. Before the housing crisis, a simple AVM used to be enough validation to close many home equity loans. Today, to use an AVM for a home equity loan appraisal, a property inspection has to be performed in some instances to take pictures and confirm the property’s condition. An AVM with a property inspection meets interagency guidelines and is a cost-efficient solution suitable for home equity valuation on lower-risk loans.
- Broker Market Value —A Broker Market Value evaluation can be a cost-effective option in the 33 states where broker/agents are allowed to provide an Evaluation containing a market value. Similar to a Broker Price Opinion (BPO) in terms of information, a BMV differs in that a market value is determined instead of a price opinion.
- Desktop Appraisal — A Desktop Appraisal with a full property inspection is the closest thing you can get to a field appraisal without it being an actual field appraisal. They are more economical, more flexible, faster, but also compliant and accurate. For home equity valuation, a desktop appraisal is completed by a state credentialed appraiser in adherence with USPAP, and includes all the data seen in a full field appraisal, including subject property inspection, subject condition, appraiser selected comparables, subject and comp photos, adjustments and full appraiser reconciliation commentary. It is a cost-effective alternative to traditional 2055 and 1004-type Field Appraisals.
- Field Appraisals — A Field Appraisal is the gold standard, when you need the most accurate valuation. Both the external 2055 and full interior 1004 are used for home equity.
While each of the featured solutions has its own advantages, smart institutions today are turning to home equity valuation companies that can offer a combination of solutions to better align with loan risk. SVI’s Intelligent Cascade is a rules-based valuation ordering platform that uses property, market, loan and borrower characteristics in conjunction with a lender’s credit risk guidelines to provide an automated product selection and upgrade workflow.
The results are superior turn times, lower costs and a suite of Interagency compliant products. Contact us today to learn more about our full suite of home equity valuation solutions.
