Crif200CRIF, the market leader in continental Europe in the field of banking credit information, has signed an agreement for the development and provision of an Automated Valuation Model (AVM) for the Italian market in partnership with Hometrack, the leading supplier of AVM technology in the UK and Australia.

This groundbreaking new service consists in the provision of a value estimate for any given residential property at a given date, using sophisticated mathematical modelling techniques in an automated and hence entirely objective manner.

Hometrack is a privately owned business with offices in London and Sydney and the exclusive AVM supplier to 4 of the top 6 banks in the UK.  Many of the largest financial institutions rely on Hometrack to provide them with the high quality, tailored information they need to make informed decisions in property. Hometrack is the only European AVM to have been reviewed in publications by all 3 major Rating Agencies and used within over 50 actual structured finance transactions.

This partnership marks a significant milestone as it combines Hometrack’s AVM knowledge and analytical excellence with CRIF Real Estate Services’ property valuation expertise which offers valuations to more than 100 Italian banks and financial institutions, in line with the most rigorous valuation criteria recognized on an international level, a network of 550 independent, qualified and certified professional valuers and the largest database of property valuations in the country.

The output of this AVM solution will come from Hometrack’s decision models and CRIF’s comparables database providing an estimate of property value at a specified date accompanied by a Confidence Level expressing the estimated accuracy of each AVM result.

AVM services are a valuable tool for risk managers who need to accurately monitor and update the market value of residential property portfolios for credit risk mitigation and regulatory compliance. AVMs can also be deployed to identify assets that need a greater level of revaluation, to limit mortgage fraud, to provide an initial indication of value for investors and consumers.

“Automated Valuation Model (AVM) services represent the most innovative and reliable technique to provide an automatic estimate of market value for residential property – says Stefano Magnolfi, CRIF Real Estate Services Director – and it completes our Real Estate Services offering, from full valuations of both retail and commercial properties with internal and external on-site inspections, to entire mortgage portfolio revaluations.”

Referring to portfolio valuations, AVMs are more reliable than traditional methodologies based on house price indexes, because AVMs don’t require a previous property value and therefore don’t carry forward any bias, fraud or excessive optimism which might have been present in the initial valuations, as well as making up for any missing or spurious data on the mortgage book.

CRIF’s agreement with Hometrack initially focuses on the provision of AVMs for the periodic revaluation of residential property portfolios in Italy as of February 2014. Subsequently CRIF, in partnership with Hometrack, will develop and market the AVM services in a number of European countries.

Source:  CRIF Press Release