The current rules demand that if financial institutions utilize AVMs (Automated Valuation Models), they must also document the actual condition of the property. Furthermore, they must evaluate critical market conditions to adhere to internal collateral protection policy.
First Service Corporation offers a report that combines all the necessary data and information to comply with the latest regulations. The SCOPE Report assists Lenders in their requirement to comply with the new Interagency Guidelines.
There are a number of factors that that must be met in order for a report to comply with the Inter-Agency Guidelines.
According to the Interagency Appraisal and Valuation guidelines, an evaluation should contain sufficient information detailing the analysis, assumptions, and conclusions to support the credit decision. A Valuation’s content should be documented in the credit file or reproducible. The Valuation should, at minimum, contain the following:
- Identify the location of the property
- Provide a description of the property and its current, and projected use
- Provide an estimate of the property’s market value in its actual physical condition and Property Type as of the effective date of the evaluation (that is, the date the analysis was completed), with any limiting conditions, if any
- Describe the method(s) the institution used to confirm the property’s actual physical condition and the extent to which an inspection was performed
- Describe the analysis that was performed and the supporting information that was used in valuing the property
- Describe the supplemental information that was considered when using an analytical method or technological tool
Indicate all source(s) of information used in the analysis, as applicable, to value the property, including:
- External data sources (such as market sales databases and public tax and lad records),
- Property-specific data (such as previous sales data for the subject property, tax assessment data, and comparable sales information
- Evidence of a property inspection,
- Photos of the property
- Description of the neighborhood; or
- Local market conditions
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