Division of First American Financial launches three new AVM options
Without question, the mortgage lending market as it currently stands can leave certain players struggling. Some, such as First American Data & Analytics, view the current landscape– driven by interest rate hikes and a collapsed refinancing market – as opportunity.
The division of First American Financial Corp. recently launched Procision, a collection of automated valuation products that uses state-of-the-art modeling and machine learning technology to compile high-quality property valuations. Such a product is particularly timely right now and important for the industry, according to Jon Wierks, First American Data & Analytics’ vice president of analytics.
“Many observers expect that there will be significant growth in home equity lending, give the current market characterized by rising interest rates combined with record levels of home equity,” Wierks said. “In this environment, lenders will value the greater levels of accuracy that our new lender-grade [automated valuation models]” offer.
First American Data & Analytics enables that market shift with its Procision product roster, he said, which includes Procision Premier, a lender grade automated valuation modeling product and Procision Direct, a portfolio analysis and marketing AVM product.
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Automation valuation models have been used for more than 30 years in the mortgage industry, Wierks noted, with banks and credit unions deploying them to help make lending decisions for home equity products. They’re also widely used for quality control, appraisal review, due diligence, portfolio analysis and marketing, he added.
Procision Premier targets lenders, servicers and decision makers in capital markets who need accurate and reliable lender-grade property valuation before making decisions about risk.
Procision Direct is a tool geared toward helping marketers designing campaigns based on home price or home equity look for broad coverage with high hit rates at an affordable price point. The company envisions marketers at lenders, real estate firms, retailers, home improvement companies and direct marketing organizations as the core customer audience.
The third new product in the collection – Procision Power – is designed to be easily embedded into client websites such as proptechs and emerging mortgage business, with an eye on tapping into another emerging market trend.
“There are … a growing number of proptechs and emerging businesses in the mortgage and real estate industries that provide a preliminary home price estimate to their prospective customers via their website,” Wierks said.
Procision Power is viewed as a white label AVM designed to provide home price estimates to consumers visiting real estate and lending websites.
First American Data & Analytics describes itself as maintaining and curating the industry’s largest property and ownership databases, including more than 7.5 billion images. Its customer base includes major lenders, proptech companies and real estate and marketing organizations.
The division claims that more than half of all US mortgage originations use its data, products and services.
Tech parts
The Procision products rely on sophisticated modeling and machine learning combined with what the company bills as the industry’s largest property and ownership database. That combo produces what Wierks refers to as a “unique blend” of models and submodels.
“For added accuracy and currency, we run Procision AVM valuations on every residential property in the US every day and update the underlying data that fuels the suite daily,” Wierks said.
He added that an automated surveillance system is always monitoring data and valuation quality. It also performs “extensive testing” to make sure the valuations produced for various property types in different geographic markets are accurate. Procision also provides documentation required by lending regulations and it is supported by a “dedicated customer service processional,” Wierks said.
First American Data & Analytics made a “significant investment” in the Procision products’ development and implementation.
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“The suite is built with the latest technology in terms of hardware, architecture, database design, delivery platforms and programming languages,” Wierks noted. “We’re committed to continuing to further enhance the suite as advances in modeling and additional data sources become available.”
The Procision products are designed to be delivered through client APIs. They can be ordered in bulk and accessed through the First American Data Tree platform, he added.
First American Data & Analytics gained its name as part of a rebranding effort in 2020. The name change is designed to reflect its growth and “the significant investment” parent First American has made and continues to make in data aggregation and technology, Wierks said.
