New Risk-Scoring Model Makes 45-Day Appraisal Possible in Four Days

By Anuradha Kher, Online News EditorReno, Nev.–InsideValuation, a Reno, Nev.-based real estate valuation company that provides valuation reports to the commercial and residential mortgage market, has upgraded its collateral risk-scoring model, InsideRisk.The InsideRisk scoring model was initially developed in 2005 to provide Wall Street investment banks with an additional level of risk rating for properties securing pools of mortgages. The upgraded version evaluates key economic and demographic data linked to approximately 43,000 five-digit residential zip codes to measure the level of risk associated with proven economic and demographic variables. This InsideRisk upgrade simplifies and expedites the loan origination process by significantly cutting down the appraisal time for a property. On an average, it reportedly takes 45 days to complete an appraisal and costs between $5,000 and $6,000. With InsideRisk, an appraisal is done within four to five days for $350.InsideRisk is useful to multifamily buyers, lenders and brokers. “We sell our product to brokers who want to keep their clients from going to other brokers,” Barry Bates, president and CEO of InsideValuation tells MHN. “If a broker tells his client that he can get an appraisal done in a few days, his client is more likely to stay with him than if he asks for a month.“This product is useful to multifamily lenders deciding whether to give a loan to a particular property as well as to individual and institutional buyers of multifamily property,” Bates adds.The five key variables that are evaluated by InsideRisk include affordability, unemployment, property crime, violent crime and gross rent multiplier. These variables are categorized by five risk rankings including low, average, elevated, high and very high.“Measuring economic and demographic data have been shown as reliable predictors of mortgage loan performance. Much of this data is in the public domain, but requires extensive ’scrubbing’ in order to refine geographic granularity and update key indicators,” Bates says.