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Risk Management Tools Useful for More than Just Mortgages

Risk management tools like automated valuation models have become invaluable in lenders’ mortgage underwriting operations when it comes to underwriting a deal and assessing property values.

In instances where a deal is high ratio, an AVM can help you assess property values before sending a deal to your insurer, thereby reducing instances where the insurer disagrees. This leads to more closed deals and strengthening lender/insurer relationships.

In instances where there is significant equity, an automated valuation model can help you to determine whether a deal should move forward to an appraisal and may even lead you to determine you don’t need an appraisal at all.

Lenders have even come to rely on AVMs when underwriting other non-mortgage credit products because applicants who have significant equity often represent lower risk. For example, a customer who comes forward looking for a line of credit who is a renter may represent more risk to you than a homeowner with equity looking for the same. Also, the homeowner with equity may represent more potential moving forward because you can offer them other financial products that relate to their home.

The use of AVMs doesn’t stop there. In recent years, many lenders have come to see the value in integrating the use of AVMs in other parts of their operations. Here are a few examples:

  • Post-funding, and again even where non-mortgage products are concerned, AVMs are a fast and easy way to assess the value of your collateral. This can help you become more informed when collecting from a client who is in default and also when making the decision to enforce on your security.
  • AVMs can also be used in your insolvency divisions. When completing proof of claims and formulating the secured and unsecured portion of monies owed to you that are included, an AVM is an excellent way to substantiate to the trustee what the value of your asset is.
  • How about sales and marketing? On the front line, AVMs are a great way for your staff to identify clients who may now qualify for additional financing and even identify upsell opportunities when working on existing deals. At a higher level, AVMs can be used to assess conditions in different areas to help you determine where it makes sense to place your marketing dollars.

In all scenarios, AVMs lead to an increased bottom line because this technology helps you to sell more, reduce risk, make more informed collection decisions and accelerate your marketing initiatives. One tool that provides ultimate value.

For more information about how you can integrate the use of automated valuation models into your mortgage operation please visit Purview at


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