A low-cost product that helps bankers determine the environmental risk posed by a property was introduced this week.
Designed by Environmental Risk Information and Imaging Services in Alexandria, Va., the product literally gives bankers an environmental picture of a property and the surrounding area, based on data from federal, state, and county records.
"ERIIScore" -- named after the firm's acronym -- can be done on any commercial or residential property in the U.S.
The $30 price tag for the analysis is a fraction of the cost for a full-blown environmental impact study, which can run from $1,500 to $3,000.
While the report doesn't replace such investigations, the firm's president, Dan prickett, said it saves bankers money by helping them decide which properties need more study.
"Lenders need less-expensive tools to screen lots of properties," Mr. Prickett said.
Most bankers now do all or nothing, he said, leaving them either in the dark about risk or out a lot of money. This product, he said, is a quick review that gives bankers the choice whether or not to go ahead with a major study.
Using algorithms, the analysis assigns a numerical value to the property as well as to comparable sites one-half mile in all directions. Land with a lower score is healthier, while a higher score suggests problem areas.
The score is based on three factors: the actual number of environmentally threatening sites, the nature of the threats, and the distance of the sites from the property in question.
In part, the product is a reaction to FDIC environmental policy guidelines, issued last year, which require bankers to do environmental analysis on every loan, said Mr. Prickett. This product will show examiners that banks are doing their job, he said.
The analysis, which can be incorporated into the origination process, is designed to lower collateral risks on residential credits.