1SD Newsletter: July 2004
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PMC Conference - Future of AVMs


PMC 2004 Shows the Future of AVM’s and Fraud Reporting

AVM’s Decide Property Value in 25% of all Loans. Fraud costs $113 per loan. So it’s no wonder 300 of the industry’s brightest mortgage minds attended this month’s Predictive Methods Conference. 1 Source Data was the only CRA asked to attend, and discovered some amazing products are already here, and the future is very bright.

Of all the loans made in the United State, an estimated 25% use an AVM to determine the property value. That’s just one of the amazing statistics that surfaced during this year’s Predictive Methods Conference.
The AVM market has doubled each year for the last three years. The PMC conference brought together nearly 300 of the industry’s brightest mortgage minds to deliberate, discuss and debate the future of automated valuation systems. Presidents of major AVM vendors mingled with Chief Appraisers from the Nation’s largest lenders and analysts from Wall Street’s biggest securities firms.

Most loan originators have yet to pull an AVM, but many of the conference attendees oversee organizations that pull 1000’s each day. For example, Bank of America and Wachovia Bank order AVM’s on 100 percent of their loans. Wachovia reported that 87% were approved using only AVM results; and B of A, 40%.

The hottest topic was Cascading – the process of sampling a series of AVM’s according to specific rules engines. Cascading is growing more and more complex. GMAC-RFC discussed their 1-year, multi-million dollar testing effort where all the major AVM products for accuracy and coverage. The effort paid off. By accounting for geography, confidence score and vendor accuracy, an amazing 97% of their orders resulted in a useful AVM.

Every major lender has developed a unique logic-driven cascade criterion, but they all agree cascading makes the process more cost efficient and more adaptable to AU engines. In the near future you’ll be able to cascade for high value, high confidence, and for selected and merged values. It will be as simple and fast as pulling a FICO score from a credit report, and the result will be much faster lending decisions.
Automated fraud products were also featured. Speakers point to a recent survey of a $1 Billion loan portfolio, showing the average loss due to fraud equaled $113 per loan – much higher than anyone expected. Veros, Appintell and ACI all discussed new databases that will put powerful fraud detection products on your desktops within the next 24 months.

1 Source Data was very proud to be the only CRA asked to attend this year’s conference, specifically to demonstrate our FirstClose transaction platform and the 8 AVM’s we offer. As one of the Nation’s largest mortgage data providers, we will provide the best of these products, making mortgage professionals more efficient and help them close more loans.

Look for more announcements later this year.

For a copy of the 1 Source Data AVM Fact Sheet, click here.