AVM Compliance through ComplianceTRACK
Nov 12, 2012
November 2012 Podcast Transcript - Duration: 8 minutes
Featuring Mike Coyne, Manager, Collateral Process at AVMetrics
Moderator: Welcome to the Veros Real Estate Solutions monthly podcast. We are heading back to talk to some friends outside of Veros today and we are live with Mike Coyne, he is the Manager of Collateral Process AB Metrics. Mike it’s great to talk with you, and I know we had Lee Kennedy out a few months ago. So, we got you here today to talk about a new offering from AVMetrics.
Mike Coyne: Yeah, thanks Adrienne, it’s good to be here. Yeah, we want to talk about the new offering. It’s called ComplianceTRACK. We are real excited about it here at AVMetrics because this is going to combine the output of our independent AVM testing that we do, predominantly that’s our model preference table. We are going to combine that with the technology platform, distribution capabilities at Veros and we are really excited about it. So, we think this is going to be the most comprehensive AVM selection option available to the compliance-minded AVM users out there right now.
Moderator: Very good, so in talking about ComplianceTRACK, you know there’s the term out there “model preference table,” I think you guys have used the term in the past “off the shelf model preference table.” Can you talk a little bit about what that means exactly?
Mike Coyne: Sure, yeah the model preference table is an output of our independent testing. What that is basically, you know from our scoring and our testing analysis that what we do develops this model preference table and we have embedded it in ComplianceTRACK. So, even though the platform is going to provide the end user with access to say fifteen different AVM’s at a single point, now, the model preference table acts as a directory within ComplianceTRACK to point that transaction request to the most competent or best qualified model, to offer evaluation for that transaction.
So, we think of it – I know a lot of our users are familiar with other evaluations so they might order an appraisal. Let’s say they are trying to get an appraisal in an area that they are not familiar with. Well, they can Google search for an appraiser in that area and take your chances on getting a qualified person, or you can reach out to one of your networks, your contacts and say, hey, I’m looking for a qualified competent person to do this assignment for this appraisal. Well, in the AVM space, that contact that you have reached out is AVMetrics, and our testing develops the model preference table, which will point you to the most qualified, most competent model for your transaction.
Moderator: Well that’s helpful and a great analogy to understand a pretty complex process. Talk to me a little bit about what goes behind the scenes in the testing and validation you guys do for ComplianceTRACK.
Mike Coyne: Yeah, you talk about complex processes; yeah we developed this proprietary scoring and testing methodology here at AVMetrics. We have been doing it for close to a decade now, we’re come sneaking up on a decade. What we basically do is have access to public and private data sources that identify residential real estate transactions. So we tap into those data sources. We have compiled test files of those properties that are for sale. We distribute those test files out to the model vendors. These are the vendors that develop the AVMs. Those guys send us back their opinion of value, they estimate the property value, unknown to them during the testing cycle, and then we analyze their responses.
We are able to generate in usually north of a hundred thousand records during a quarterly cycle. We evaluate their returns. Develop scores for each of the models and then the result is that model preference table that we talked about earlier.
Moderator: Very good, so you guys are really providing independent and objective testing and then providing that information back through ComplianceTRACK in a way that really allows people to get the benefit of your testing in a compliant order fashion. Is that articulated well?
Mike Coyne: Yeah, well said. We are one of the few, if not the only testing firms that provide that independence. You know the ComplianceTRACK piece we are talking about inherent in the name ComplianceTRACK is compliance to the regulatory guidance, is what we’re talking about. And one of the main things that the regulators are looking for is that independent aspect of testing. So, either users of AVMs do that testing themselves or they have to hire an outside third party. You know they can’t rely on the AVM vendors themselves to provide testing and analysis of their own product. It’s just a concern out there that might be bias.
Moderator: Sure and that leads me to my next question. I was hoping you could explain more specifically too, how exactly this offering is different from the methods others have used in the past for being compliant with their AVMs?
Mike Coyne: Yeah, that’s a great question too. You know basically in the past there has really only been two methods of getting this done. Either you had the means or resources to do it internal within your institution, or you went out and hired a third party like AVMetrics to do it. In the past, you know unless you are one of the big boys that have that resource and the cost, it’s not economically efficient to do that. We’ve had to deal with a lot of our smaller clients, that it just doesn’t become cost effective for them to do this and unfortunately they have opted out of using AVMs all together in some cases.
So, we feel like this is a great way to make our independent compliant testing available on a transactional basis, so that those users can access the right, the best AVM, most competent AVM in a compliant fashion. It is going to lessen their economic burden and make it easier to comply with the regulations at the same time./p
Moderator: You know everyone is focused on being compliant with the Interagency Guidelines and so how is this offering compliant with the guidelines?
Mike Coyne: Well, it’s interesting. We provide a due diligence packet along with this product that outlines specifically the guidance from OCC, 2010-42, and 2011-12, which are the most recent guidance offered by the Interagencies on evaluations and AVMs and model usage within the institutions. And we go through it bullet by bullet and outline how our process complies with and follows that guidance and also what portions of that guidance is not included and is still for the banks to handle or the institution to handle.
Moderator: So, it’s really kind of bundled from end to end for those AVM users.
Mike Coyne: Certainly, if they are a compliance-driven AVM user, we feel that this is going to get them leaps forward toward their compliance aspect for their AVM program, yes.
Moderator: Well thanks, that’s really all great information. I want to point out to our listeners, that if you are looking for additional information about ComplianceTRACK, you can visit Veros.com and there’s information about the product available here. If your organization is a regulated institution like Mike referred to and you don’t have a compliance-based protocol for AVMs, or if your resources are overburdened as we mentioned, I would definitely urge you to take a deeper look at ComplianceTRACK.
So Mike thanks for joining us today it was really helpful information.
Mike Coyne: Well, thank you, I appreciate the opportunity. It’s good to talk to you again.
Moderator: Well, thank you, I appreciate the opportunity. It’s good to talk to you again.