Wednesday, September 12, 2007

In a Hole? Keep Digging!

by Tanta on 9/12/2007 03:33:00 PM

Normally I see very little point in reading press releases, but this one caught my eye. Worried about lenders using those AVMs to value real estate in mortgage lending transactions? Worry no more! You can now buy a cheap piece of software to "test" the results of your cheap piece of software! It will either still be cheaper than sending an appraiser out to look for foundation cracks, which will mean no one will ever look for foundation cracks, or it will be even more expensive what with running both kinds of software, in which case, we'll pass that "savings" on to you, the consumer, and still not use professional appraisers! You have to love simple solutions to regulatory policy changes.

Is it happy hour yet?

AUSTIN, Texas, Sep 12, 2007 (BUSINESS WIRE) -- FirstClose, a service of First Lenders Data, Inc. (FLDI), an Austin, Texas-based provider of bundled mortgage settlement services, announced today that it has developed a comprehensive approach to back-testing Automated Valuation Models (AVMs), entitled ValueTest(TM).

The ValueTest(TM) program is designed to help lenders satisfy recent regulations and guidelines from Fannie Mae, Freddie Mac, the OCC, the NCUA, and other regulatory bodies that have imposed requirements or guidelines on lenders to "back test" AVMs regarding their accuracy. Utilizing a vast array of the mortgage industries top AVM companies and collateral risk assessment tools, ValueTest(TM) provides lenders with a simple, easy, and inexpensive way to satisfy regulatory requirements.

"We are excited about offering an inexpensive, yet comprehensive solution to our mortgage lending customers to help them satisfy regulatory requirements," said Tedd R. Smith, Chief Executive Officer of First Lenders Data, Inc. "Back Testing AVMs has been an ongoing concern of our customers since regulatory inception and no one seems to be able to provide a safe and inexpensive solution until now."

According to Fannie Mae's Perspective on Automated Valuation Models (AVMs), "It is critical that users of AVMs design an appropriate use and implementation strategy that considers the overall credit risk of the loan and reflects the specific strengths and weaknesses of the particular AVMs they use, particularly the property data supporting those products." The ValueTest(TM) program works well for any mortgage lender offering both first and second mortgage loans. As part of quality control checks and balances, the ValueTest(TM) program can be custom designed to fit any lenders needs and requirements.
Oh, the vendor of this wildly exciting product also sells "settlement services," meaning it has a vested interest in seeing to it that closings don't get cancelled because of those pesky "valuation" problems. Surprise! Could that be why this is so "inexpensive," or is it just some PlaySkool My First Laptop-quality version of everyone's favorite game, Regulatory Evasion? Or both?

As soon as I finish development of HorseHockeyTest™, I'm going to quit blogging and get rich. You have been warned.