Mortgage Enforcement Tools and Tips: Lenders Use AVMs to Collect More

We blog a fair amount about automated valuation models (AVMs) and how lenders use them. This is because, while they are widely discussed for being used in the sales, application and credit adjudication stages, AVMs are actually used across many different departments within financial institutions.

AVMs are particularly useful in the area of mortgage collection and enforcement. In collection and enforcement, the more you know about your client and security, the better. Power of sale is not always the best answer and it is better to know enough about the complete picture than to face surprises later.

AVMs help you quickly learn the value of a particular property. While that information is very useful when collecting a debt, some AVM platforms like Purview For Lenders include their AVMs inside a more comprehensive report, so on the collection and enforcement side they are able to:

• Validate addresses
• Validate home ownership information
• View registered mortgages
• View registered liens
• View an estimated property value
• View exterior and aerial imagery and more

Searches can be performed by name or address. Either way you have to know the Land Registry Office that the subject property is located in. If you know the homeowner’s name and not their address, you can still produce a search result.

This is handy to see many different things when you are looking at how you will collect your debt:

• You can use it to locate people who have disappeared – maybe your client owned more than one property.
• You can use it to get an idea regarding the financial positing of a property – maybe after your mortgage your client got subsequent financing.
• You can use it to learn if someone owns a home to enforce a judgement.
• You can use it to estimate equity in a property you have financed that has gone into default – this comes in handy when you are considering instituting a power of sale.
• You can use it to check if a condo has placed a lien on a property or a lien has been placed for unpaid property or income taxes  

Having the answers helps allow you to make some solid decisions about how you are going to go about collecting your money and what role your client’s property will pay in the collection of your debt. This will position you take collection action armed with as much of your client’s true and current financial picture as possible.

For more about the value of an automated valuation model please contact Teranet today by calling 1.855.787.8439.