Equifax has released a tool that lets banks compile different collateral-valuation models and rank them based on accuracy.
The Collateral Value Connector, announced Monday, is an automated valuation model that provides a rank-ordered grouping of the industry's valuation models by accuracy. This allows banks to see a single collateral valuation based on multiple valuation models, the release said.
Equifax partnered with Southwest Financial Services to test and validate the valuation models it uses, it announced. Southwest provides appraisal management and valuation services.
Southwest tests the accuracy of collateral-appraisal models weekly, on a county-level basis, to ensure the accuracy of the Collateral Value Connector's rankings.
"For lenders, the need for valuation accuracy and transparency is more important than ever," said Craig Crabtree, senior vice president of Equifax Mortgage Services, in the news release. "Through Southwest Financial Services' independent and comprehensive testing criteria, the Equifax Collateral Value Connector exceeds the standard automated valuation model to deliver an unparalleled level of accuracy, coverage and documentation that lenders can rely on to effectively manage their collateral risk and meet regulatory compliance demands."
