On December 10, 2010, five federal banking agencies, the OCC, FRB, FDIC, OTS and NCUA, issued their revision to the Interagency Appraisal and Evaluation Guidelines. The revised guidelines became effective immediately. One of the most important aspects is that AVMs and Tax Assessed Values (TAVs) can no longer be used on home equity and second mortgages without a property condition report and extensive back-testing. FirstClose offers lenders simple, cost effective, and comprehensive solutions.
By combining our existing AVMs along with our Property Condition Report and AVM back-testing, FirstClose has the products and services available today to help you comply with the newly revised evaluation guidelines. Samples of these solutions are available below.
The solutions listed below help lenders comply with these key changes to the Appraisal and Evaluation Guidelines.
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- What do the Guidelines say about AVMs?
- The guidelines state that "An institution may not rely solely on the results of an AVM to develop an evaluation unless the resulting evaluation is consistent with safe and sound banking practices and these Guidelines...to be consistent with the standards for an evaluation, the results of an AVM would need to address a property's actual physical condition." (i)
- What about AVM Testing?
- The guidelines state, "An institution should establish standards and procedures for independent and ongoing monitoring and model validation, including the testing of multiple AVMs, to ensure that results are credible." (ii)
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Property Condition ReportWhen bundled with an AVM, AVM validation and testing, or a TAV, our Property Condition Report can help satisfy Interagency Appraisal and Evaluation Guidelines in an average of two business days.
Within the FirstClose platform, you can order a quality property condition report from our nationwide network of professional real estate experts. With the FirstClose Property Condition Report, you receive the following:
• Physical Condition of the Subject Property
• Overall Marketability
• Neighborhood Influences
• Exterior Property Photo
• Map Location
• Coverage in all 50 States
SAMPLE Property Condition Report 
Desktop Valuations
As an alternative to the 'AVM + Property Condition Report' solution, FirstClose also helps lenders comply with the Interagency Guidelines with Desktop Valuations with site inspection.
Our valuation platform gathers a full set of property and market data onto a staff appraiser's desktop. The appraiser employs tools to filter, adjust and weight the data and applies logic to four distinct industry accepted valuation methods. The appraiser reviewed data and value methodologies are then passed to our proprietary valuation engine. The result is an objective value with a supported value conclusion including backup data and analytics.
Solution Options
• Desktop Valuation w/ Ext. Site Inspection - includes ext. property condition, ext. subject photos, comps, MLS and market data
SAMPLE Desktop Valuation w/ Ext. Site Inspection
• Desktop Valuation w/ Int. & Ext. Site Inspection - includes int. and ext. property condition, int. & ext. subject photos, comps, MLS and market data
SAMPLE Desktop Valuation w/ Int. & Ext. Site Inspection
Report Contents
• Full summary: subject, comps, MLS and market data
• Fraud and Risk indicators for the subject and market
• MLS photos
• Map of subject and comps
• Satellite imagery of subject and comps
• Optional Broker site inspection: photos, property condition, market conditions
• 4 distinct Value Indicators
AVM SolutionsOur suite of vendors offers the greatest geographic coverage, hit rate and accuracy in the industry. Our system also offers the flexibility to change vendors in the cascade order quickly and easily. Choices include:
• Freddie Mac - Home Value Explorer® (HVE)
• LPS - ValueSure
• Fiserv - CASA
• CoreLogic - GEO AVM (Cascade)
• CoreLogic - HPA
• CoreLogic - ValuePoint4
• CoreLogic - PowerBASE 6.0 (thru GEO AVM cascade only)
• CoreLogic - PASS
• MDA Lending Solutions - ValueWizard
• Veros - VeroValue
• AVMax
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AVM Back-Testing (ValueTest)
The FirstClose ValueTest is a comprehensive approach to testing and validating property data supporting AVMs. It is designed to help lenders satisfy the Interagency Appraisal and Evaluation Guidelines.
Compares multiple AVMs and mimics 2nd mortgage AVM ordering methods, including Cascading AVMs. Compares AVMs to current purchase prices & current appraised values. Additional Flip/Fraud protection tools available, such as Loan IQ and History Pro.
ValueTest monthly reports provide:
• Standard deviations & statistics relating AVMs to Current Purchase Prices.
• Standard deviations & statistics relating AVMs to Current Appraised Values.
• Enables lenders to QC first mortgage appraisals and pass legitimate fees onto first mortgage borrowers.
SAMPLE ValueTest Report
