First American CoreLogic Releases Latest LoanPerformance MarketPulse Report
—Study Explores Accuracy of Broker Price Opinion Versus ValuePoint4 Default™ Automated Valuation Model—
March 4, 2008, SANTA ANA, Calif.
First American CoreLogic, a member of The First American Corporation (NYSE:FAF) family of companies and a leader in residential mortgage data and analytics for the mortgage industry and Wall Street, today announced that the latest issue of its LoanPerformance MarketPulse report is available for download at www.loanperformance.com.
This latest report features a new First American CoreLogic white paper entitled, “Assessing Broker Price Opinion Accuracy: Can a Tailored Default AVM Perform at Parity?,” by Robert L. Walker, executive vice president, collateral solutions for First American CoreLogic and Mark Fleming, chief economist for First American CoreLogic.
According to Walker and Fleming, lenders, servicers and investors must determine when a broker price opinion (BPO) is the appropriate valuation method and which BPO provider to use. Selection criteria can include turnaround time, customer service and price, but these criteria do not necessarily indicate valuation accuracy. In fact, there is little documented research indicating the accuracy of BPO valuations. A more important selection criterion should be consideration of technique accuracy relative to the risk of delinquency and loss severity, as well as the extent of due diligence performed and reasonable pricing. “ValuePoint4 Default™* (VP4 Default) is an automated valuation model (AVM) that has been explicitly designed and calibrated to predict a “distressed value” for the property as opposed to a market value,” said Walker. “In this paper we study BPO accuracy in the specific application of assessing real estate owned (REO) sale value, which is becoming increasingly more common. We then compare BPO accuracy to that of VP4 Default on the same sample of REO sales. The results of this test show that VP4 Default can perform at accuracy levels similar to that of BPOs tasked with REO value assignment.”
The MarketPulse report also summarizes a selection of key mortgage performance statistics through September 2007, including summary data on serious delinquency and prepayment rates for prime and subprime loans. MarketPulse is a complimentary quarterly report that presents analysis of and insight into delinquency and prepayment trends for the prime, subprime, home equity, mortgage-backed and asset-backed securities markets. Each issue also contains a “RiskView” section with valuable insights from thought leaders on the prime, subprime and securities mortgage marketplace. The summary data in each issue of MarketPulse is extracted from the First American CoreLogic industry-leading LoanPerformance mortgage servicing and securities databases. MarketPulse can be accessed by completing the electronic subscription form at www.loanperformance.com/marketpulse.
About First American CoreLogic
First American CoreLogic, a member of The First American Corporation (NYSE:FAF) family of companies, was formed through the merger of First American Real Estate Solutions, America’s largest provider of advanced property and ownership information, analytics and services, and CoreLogic, the leading provider of residential mortgage risk management and fraud protection technology and services. The combined companies’ databases cover more than 3,000 counties, representing 99.1 percent of the United States population. With more than 600,000 users nationwide, First American CoreLogic products are used by businesses to improve customer acquisition and retention, detect and prevent fraud, improve mortgage transaction cycle time and cost efficiency, measure the value of residential and commercial properties, identify real estate trends and neighborhood characteristics, track market performance and increase market share. More information about First American CoreLogic can be found at www.facorelogic.com.
About First American
The First American Corporation (NYSE: FAF) is a FORTUNE 500® company that traces its history to 1889. With revenues of approximately $8.2 billion in 2007, it is America’s largest provider of business information. First American combines advanced analytics with its vast data resources to supply businesses and consumers with valuable information products to support the major economic events of people’s lives, such as getting a job, renting an apartment, buying a car or house, securing a mortgage and opening or buying a business. The First American Family of Companies, many of which command leading market share positions in their respective industries, operate within five primary business segments, including: Title Insurance and Services, Specialty Insurance, Mortgage Information, Property Information and First Advantage. More information about the company and an archive of its press releases can be found at www.firstam.com.
* ValuePoint is a registered trademark of First American CoreLogic.