April 2018 VA Loan Guaranty Service VA AMS Presented by Kevin Eason Valuation Officer Denver RLC Introduction Presenter Kevin C Eason Denver RLC Valuation Officer Why AMS ID: 774599
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Prepared by : Loan Guaranty Service
April 2018
VA Loan Guaranty Service
VA AMS
Presented by
Kevin Eason, Valuation Officer, Denver RLC
Slide2Introduction – Presenter - Kevin C. Eason, Denver RLC Valuation OfficerWhy AMS?C&V Responsibilities and VisionData Sources and Coverage Capabilities and Efficiencies AMS Big PictureLSAM, AVM, MARS- Current State of Affairs How VA stacks up against the Consortium Appraisal Review Workflow ProcessQuality versus TimelinessLow Risk Versus High Risk Reviews
2
Agenda
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C&V Responsibilities and Vision
C&V’s Responsibilities:
The Construction and Valuation (C&V) Section is responsible for the quality of appraisal reports on properties offered as security for VA guaranteed loans.
C&V’s Vision:
Credibility and Quality
Standardization
Risk Management
Performance
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Why AMS? Partnering with a Market Leader
Who is CoreLogic?The primary objective is to transition to a risk-based analysis of appraisals. With the Implementation of AMS, SARs and VA Staff will have automated risk-based review workflow from one reliable source.
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Why AMS? Access to CoreLogic Big Data Assets
3
rd
Party Data
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Why AMS
? MLS Coverage
85%+
Percent of Active Listings to Total Parcels
3.0% and above
1.5% to 3.0%0.5% to 1.5%0.5% and below
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Why AMS? Capabilities and Efficiencies
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VA AMS Big Picture: LSAM, AVM & MARS Basics
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VA AMS Big
Picture: LSAM Features
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VA AMS Big Picture: Complete Appraisal Risk Analysis
-Valuation Risk
– is the appraised value reasonable and supported?
-Integrity Risk
– Are there fundamental issues with the construction of the appraisal?
-Comparable Selection
– Were the most similar comparables used?
-Property Complexity
– Does the subject conform to the area, or is it very unique?
-Market Risk
– Is the subject located in a high risk area?
-Misrepresentation Risk
– Are there issues within the subject chain of title posing risk?
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VA AMS Big Picture: Alerts
647+ Rules
– Within seconds, LSAM analyzes every field in the appraisal.
Smart/Intelligent Rules
– dynamically constructed with conditions similar to how a reviewer reviews an appraisal. This minimizes false positive rates, reduces unnecessary work and identifies meaningful issues similar to what an experienced reviewer would identify.
Compliance
–
Assure compliance with
FIRREA, USPAP, FHA, VA, UAD
Data Consistency
– Assure consistency throughout the appraisal.
Configurable
– Turn on/off alerts, change alert severity and modify the Recommended Action.
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VA AMS Big Picture: Current “High 90” Alert Profile
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VA AMS Big Picture: Subject Property Information
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VA AMS Big Picture: MLS Data and Comparable Analysis
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VA AMS Big Picture: Comparable Sales Data Validation
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VA AMS Big Picture: Interactive Maps
Zoom in/Zoom out, Birds Eye View, Aerial View
Displays Appraisal Comps Along With CoreLogic MLS and Public Record Comps
Value Map Shows Shaded Areas Depicting Value RangesQuickly Identify Comps Located In Superior Inferior Areas Compared To The Subject
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VA AMS Big Picture: Market Conditions by Zip Code
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VA AMS Big Picture: Automated Valuation Model (AVM)
What is an AVM?
An AVM is a computer-driven mathematical formula that uses basic property characteristics, local market information, and price trends to arrive at an estimated value or value range.
AVMs Versus Appraisals
AVMs are not the same as appraisals. When completing an appraisal, an appraiser conducts a property and neighborhood inspection. From the site and comp inspections, the appraiser writes a report that typically includes inspection details and a more in-depth evaluation of the property, neighborhood, and surrounding market.
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VA AMS Big Picture: What is an AVM Cascade?
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VA AMS Big Picture: AVM Valuation Summary
The AVM will confirm if the valuation was successful or not.
Estimated Value
Value as of
Date
reflects
the effective date of the valuation.
Estimated Value Range
Processed Date
reflects the date that the AVM was ordered.
Confidence Score
is the probable accuracy of the AVM result.
Forecast Standard Deviation (FSD)
Score
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VA AMS Big Picture: Mortgage Analytics Reporting Tool (MARS)
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Current State of Affairs: LGY Valuation Risk Score Benchmark
Note: High Risk Appraisals include undervaluation, overvaluation .
Does not include N/A
Score (464,898)
Data range between June 1, 2014 to
February 28, 2018
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Current State of Affairs: LGY Integrity Risk Score Benchmark
Data range between June 1, 2014 to February 28, 2018
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Current State of Affairs: VA Appraisal Volume by State
Legend:
Darkest Red (Lowest Number) to Darkest Green (Highest
Since Oct 1, 2017
806,983 total appraisals
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Current State of Affairs: 1073/75 (Condominium)Appraisal Volume by State
Legend:
Darkest Red (Lowest Number) to Darkest Green (Highest
Since Oct 1, 2017
26,277 total 1073/1075 appraisals
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Current State of Affairs: 1004c (Manufactured)Appraisal Volume by State
Legend:
Darkest Red (Lowest Number) to Darkest Green (Highest
Since Oct 1, 2017
17,586 total 1004c appraisals
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Current State of
Affairs: LGY Wheel of Cursory Review
RLC Cursory Review
Atlanta
Cleveland
Denver
Houston
Phoenix
Roanoke
St. Paul
St. Pete
National
Total Cursory Review
67,393
61,280
63,960
43,176
92,802
46,661
40,050
55,749
471,071
Total Appraisals
*
121,743
114,596
101,204
89,167
130,077
79,243
73,316
97,637
806,983
% Cursory Review
55%
53%
63%
48%
71%
59%
55%
57%
58%
*Cursory Review is defined as appraisals that have Valuation Risk Score between 300-699 and Integrity Risk score under 699.
Note:
Date Range October 1, 2017 to February 28, 2018.
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VA Appraisal Workflow Process: Quality v. Timeliness in the real world
LSAM scores and grades the
quality
of the appraisal.
Valuation- Is the subject property over- or undervalued? If so why?
Integrity (4 corners) of the appraisal form. Does the appraisal form comply with UAD, USPAP and VA appraisal requirements?
WEBLGY tracks the
timeliness
of the Appraiser, SAR, & VA Staff.
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VA Appraisal Workflow Process
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VA Appraisal Workflow Process
When performing a Low Risk (Cursory) or High Risk review, SARs should ask themselves the following questions on all VA appraisals:Does this appraisal qualify for Cursory Review?Were all high alerts addressed? Many identify and assist you with answering the questions below.Was the appraiser timely?Was contract price above market value? Tidewater initiated?Was the appraisal package submitted complete?If MPRs present, were they classified and addressed properly?If proposed/new construction is there a valid builder ID?If subject is a condominium, is there a valid condominium ID number?Is the subject is on leasehold land? Was the NOV conditioned properly?Did the appraiser perform the scope of work and develop and report credible results?
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Questions?