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Veros Publishes New Research Paper on Optimizing AVM Testing Methodologies
Veros Publishes New Research Paper on Optimizing AVM Testing Methodologies

Business Wire

time4 days ago

  • Business
  • Business Wire

Veros Publishes New Research Paper on Optimizing AVM Testing Methodologies

SANTA ANA, Calif.--(BUSINESS WIRE)-- Veros Real Estate Solutions (Veros®), a leading provider of collateral property valuation and risk management solutions, has released a groundbreaking new research paper which examines prevailing methodologies for testing the accuracy and performance of Automated Valuation Models (AVMs), a vital tool in the housing finance market. The paper, titled " Optimizing AVM Testing Methodologies," was thoroughly researched by Veros' Senior Research Economist, Reena Agrawal. It highlights key challenges and proposes an improved approach that aligns with real-world mortgage lending practices. "Some current AVM testing practices have inherent biases that can skew performance evaluations and misrepresent real-world accuracy." — David Rasmussen, EVP Operations at Veros Share As AVMs continue to play a critical role in property valuations for housing finance and risk assessment, the accuracy of AVM testing methodologies is increasingly under scrutiny. Veros' research paper provides an in-depth analysis of three testing approaches— purchase transactions testing, refinance/HELOC appraisal testing, and pre-MLS listing testing —assessing their strengths, limitations, and influences on reported AVM performance metrics such as P10 and hit rate. Key findings from the research paper include: Data Access & Timing Matter – A representative and accurate evaluation hinges on when the test is conducted and how much information the AVM can access. AVM Use Cases Matter – This paper emphasizes the critical importance of considering AVM use cases when evaluating AVM performance. A New Approach – This research aims to address some common and previously unchallenged opinions on AVM testing as it aims to significantly enhance the transparency and applicability of AVM testing results. "Some current AVM testing practices have inherent biases that can skew performance evaluations and misrepresent real-world accuracy," said David Rasmussen, EVP Operations at Veros. "The research by our Senior Research Economist underscores the need for a standardized, data-driven approach that aligns with how AVMs are actually used in lending decisions. By introducing a methodology that evaluates true AVM performance, we can ensure a more level playing field and improve the market's understanding and confidence in automated valuations." The research paper underscores the importance of continuous validation and the need for testing methodologies to evolve alongside advancements in technology and data availability within the property valuation spectrum. By challenging existing assumptions and proposing a more representative testing framework, this research contributes to a deeper understanding of AVM capabilities and their role in the housing finance market. Veros invites industry stakeholders, lenders, regulators, and AVM providers to review the research paper and join the discussion on refining AVM testing standards. The full research paper is available for download at: AVM Method Testing on VeroVALUE A mortgage technology innovator since 2001, Veros is a proven leader in enterprise risk management and collateral valuation services. The firm combines predictive technology, data analytics, and industry expertise to deliver advanced automated solutions that control risk and increase profits throughout the mortgage industry, from loan origination to servicing and securitization. Veros' services include automated valuation, fraud and risk detection, portfolio analysis, forecasting, and next-generation collateral risk management platforms. Veros is the primary architect and technology provider of the GSEs' Uniform Collateral Data Portal® (UCDP®). Veros also works closely with the FHA to support its Electronic Appraisal Delivery (EAD) portal. The company is also making the home-buying process more efficient for our nation's Veterans through its appraisal management work with the Department of Veterans Affairs. For more information, visit

Veros Launches ValuSTREAM: An Optimized Independent Third-Party Tested AVM Cascade
Veros Launches ValuSTREAM: An Optimized Independent Third-Party Tested AVM Cascade

Associated Press

time12-03-2025

  • Business
  • Associated Press

Veros Launches ValuSTREAM: An Optimized Independent Third-Party Tested AVM Cascade

Veros Real Estate Solutions (Veros®), a leader in risk management and collateral valuation services, is pleased to share with the housing finance industry ValuSTREAM ™, an advanced automated valuation model (AVM) cascade solution. This new solution is now available through VeroSELECT ® and Valligent via Acuity and other direct integrations. ValuSTREAM ensures reliability and performance with independent, third-party AVM testing conducted quarterly for rigorous due diligence. This testing, Powered by CoreLogic® OptiVal®, leverages both purchase and non-purchase data to optimize AVM performance. With ValuSTREAM, lenders gain the peace of mind of a fully managed solution: they simply order the product and never worry about constantly making changes to their cascade presences, as it's set for them and regularly updated based on the OptiVal testing. OptiVal operates as an independent AVM testing unit within CoreLogic and is vendor agnostic, meaning it relies solely on real-world testing data to identify the best AVMs. This advanced cascade solution refines AVM selection at the county level, ensuring location-specific valuation precision and continuous updates that adapt to shifting market conditions. The results give mortgage lenders and real estate professionals the confidence to make informed decisions. 'Lenders need valuation solutions that provide transparency and performance they can trust. By continuously refining AVM selection at the county level and ensuring the highest standards of data integrity, we are delivering a solution that enhances underwriting efficiency and reduces valuation risks,' said Eric Fox, Chief Economist and Senior Vice President of Analytics at Veros. Veros' latest solution redefines how AVM cascades operate by offering tailored valuation strategies that align with specific business objectives. Whether prioritizing accuracy, maximizing market coverage, or achieving a balanced approach, ValuSTREAM provides a flexible framework that can fulfill varying needs. It also meets compliance standards, making it a trusted choice for financial institutions navigating regulatory requirements. 'As the industry-leading AVM cascade solution, CoreLogic's OptiVal is the ideal solution to support ValuSTREAM. Our unique data, analytics, and cascade management will provide an ideal offering for clients who need a proven, compliant offering to address their lending needs,' said Sage Nichols, SVP, Collateral and Risk Solutions at CoreLogic. ValuSTREAM sets a new benchmark in AVM-driven valuations, enabling mortgage lenders and investors to make faster, smarter business decisions. About Veros Real Estate Solutions (Veros®) A mortgage technology innovator since 2001, Veros is a proven leader in enterprise risk management and collateral valuation services. The firm combines predictive technology, data analytics, and industry expertise to deliver advanced automated solutions that control risk and increase profits throughout the mortgage industry, from loan origination to servicing and securitization. Veros' services include automated valuation, fraud and risk detection, portfolio analysis, forecasting, and next-generation collateral risk management platforms. Veros is the primary architect and technology provider of the GSEs' Uniform Collateral Data Portal® (UCDP®). Veros also works closely with the FHA to support its Electronic Appraisal Delivery (EAD) portal. The company is also making the home-buying process more efficient for our nation's Veterans through its appraisal management work with the Department of Veterans Affairs. For more information, visit (714) 415-6300 SOURCE: Veros Real Estate Solutions Copyright Business Wire 2025. PUB: 03/12/2025 05:30 AM/DISC: 03/12/2025 05:29 AM

Here's what to expect during the home equity loan underwriting process
Here's what to expect during the home equity loan underwriting process

CBS News

time13-02-2025

  • Business
  • CBS News

Here's what to expect during the home equity loan underwriting process

If you need to borrow cash, taking out a home equity loan is one of the most affordable ways to do it. Rates on these loans and home equity lines of credit (HELOCs) tend to be much lower than other financing products, such as credit cards and personal loans, and they can save you significantly in the long run. Just be prepared: The borrowing process is a bit different from other lending products, mostly due to the prime role your home plays, so it's important to understand how that works before tapping into your home's equity. Compare today's home equity rates and find the right option for you. Here's what to expect during the home equity loan underwriting process Are you planning to tap your home equity for cash in the near future? Here's what to expect from the borrowing process. Your home will play a big role The biggest difference with home equity loans when compared to other types of borrowing products is that your house will play a critical role in the process. This is because it will serve as the collateral for the loan — and is what the lender can seize if you fail to make your payments. Your home (and its market value) will also influence what you can borrow with your loan. To determine this, most lenders will order an appraisal. The appraiser will assign the home a value based on its age, condition, features, and local home sales data, and that number — minus what you owe on your main mortgage loan — will tell lenders how much equity you have and, therefore, how much you have to borrow from. "One of the biggest struggles in the industry is that people come in having an idea of how much money they want but they have no idea how much equity they have in their home," says Dre Torres, a loan officer at Cornerstone First Mortgage. "It can make things difficult when they come in wanting more cash than they have available." Typically, an appraisal is an in-person evaluation of the home, but that's not always the case. Some lenders may take a more digital, data-based approach instead. These are sometimes referred to as "automated valuation models" or AVMs. "We use automated valuation models to estimate your home's value, and if the AVM's confidence score is strong, a full appraisal may not be necessary," says Scott Bridges, chief consumer direct lending production officer at Pennymac. "This saves you both time and money." In some cases, you may not need an appraisal at all. For example, if you only closed on your loan a year ago and you still have a very recent appraisal, you may be able to use that instead. Still, "90% to 95% of the time for home equity loans, you will need an appraisal," Torres says. Learn how affordable home equity borrowing could be now. Your finances will be scrutinized You can also expect your finances to be scrutinized pretty carefully, largely because home equity loans are riskier than traditional mortgages. They are an extra monthly payment in addition to your normal mortgage and bills, and as such, lenders want to ensure you can handle the additional financial pressure that puts on your household. One thing they'll look at is your credit score. And while the exact minimums you'll need to meet depend on the lender you choose, you can usually expect to need a 650 score or higher, Torres says. "Higher scores — 700 plus — will get more favorable financing options," Torres says. Lenders will also look at other financial factors, llke your other debts, your income and your credit history. Your debt-to-income ratio (DTI), or how much of your income your debt payments take up, will also play a role. You can calculate your DTI by totaling up your total minimum payments across all your debts — including the new home equity payment — and then dividing by your monthly income. Most lenders want a DTI of 43% or lower, though some may allow for higher DTIs under certain circumstances. Keep in mind, though: "A lower DTI will open the borrower up to more programs and better rates within those programs," says Kevin Leibowitz, a mortgage broker with Grayton Mortgage in Brooklyn. You'll want to come prepared Before you apply for a home equity loan, Bridges says, "It's important to assess your financial health." "First, determine how much you need to borrow and what monthly payment you'd be comfortable with," Bridges says. "Second, know your credit score and take steps to improve it if necessary. The better your credit score the more loan options are available to you." You can improve your credit score by reducing your debts, paying your bills on time and disputing any errors on your credit report. Not opening any new lines of credit in the months leading up to your application can also help. Beyond this prep, you can also gather up the documentation you'll need for the loan. As with your first mortgage, you'll need things like your pay stubs, bank statements, and W-2 forms. And "if the borrower's profile is more complex, then tax returns might be required," Leibowitz says. If you're on Social Security, you'll also need your award letter, or if you're receiving funds from a pension or IRA, you'll need recent statements from those accounts as well. The bottom line If you're considering a home equity loan, reach out to a lender to get more information on what qualifications you'll need to meet and what it may mean for your finances. They can also help you understand what terms and interest rate you might qualify for and how that fits into your budget. You should also compare several lenders before deciding what company to go with. Different lenders offer different programs, rates, fees, and terms, so shopping around can ensure you get the best loan for your needs.

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