International chess champion Gary Kasparov recently succumbed to a computer; why should it be any different for your neighborhood real estate appraiser?

Automated valuation, one of myriad technologies displayed at an America's Community Bankers conference in Chicago this week, enables lenders to create reports on real estate value complete with comparable sales data, maps, and digital photographs-all at the click of a mouse.

Although federal law requires that a licensed appraiser review collateral for any home loan larger than $250,000, the technology gives banks an alternative to expensive appraisals for many loans. The only question for appraisers, speakers at the conference said, is whether to harness the new technology or be supplanted by it.

"We're going to have to develop a different relationship with our clients," said Joseph L. Minnich 3d of Minnich Appraisal Group Inc., Catonsville, Md.

The conference targeted members of the trade group for small banks and thrifts who are wrestling with a key decision: whether to make a potentially substantial investment in technology that would level the playing field with larger players-or risk being acquired by them.

Sessions focused on techniques of mining company records for information on customers who could present cross-selling opportunities, on automated underwriting, and on computer-based systems offered by the secondary mortgage agencies Fannie Mae and Freddie Mac.

Freddie Mac officials touted the efficiency of electronic appraisal, but a spokeswoman said the agency requires that a third party complete the appraisal-automated or manual-for loans it buys.

Exhibitors said investing in automation is especially important as community banks branch into such businesses as lending to less creditworthy customers and making loans for up to 125% of the value of a home.

"Home equity lines of credit are very hot now," noted Charles R. Pelton, senior vice president of the banking services group at FIS Inc., Orlando.

"We're seeing a tremendous shift toward lower-credit-quality loans," he said. The change means banks must adopt systems geared to detecting early warning signs of credit trouble, and to helping banks devise recovery plans for delinquent loans, Mr. Pelton said.

Those who use automated valuation generally rely on the technology only to double-check earlier appraisals as they consider applications for home equity lines and second mortgages.

Recently, however, a few lenders have started to use the tool for first mortgages, said Lewis J. Allen, director of research and development for Experian Inc., Anaheim, Calif., one of a half dozen firms to offer automated valuation systems.

The Experian system enables lenders quickly to review sales information compiled by tax assessors in 125 counties from 22 states. About 30 clients use this tool, Mr. Allen said.

Eric Von Pingle, a senior vice president of Bank of America, Pleasant Hill, Calif., a unit of BankAmerica Corp., said the banking company uses automated valuation to supplement traditional appraisals in six western states.

An automated valuation costs from $25 to $40, he said, and can be completed within five minutes. Traditional appraisals cost up to $400 and take from three days to three weeks, he said.

Based on cases where a value has been determined through arbitration, automated valuations have proven virtually indistinguishable from appraisals in terms of accuracy, he said.

The main drawback is that data are insufficient in many regions to produce valuations, meaning that users of the automated systems must turn to appraisers to perform the trickiest appraisals anyway, Mr. Von Pingle said.

He also advised lenders not to rely too much on automation, especially in cases where a history of environmental contamination in the area of the property, or some other unusual circumstance, warrants a physical inspection.

Mr. Minnich argued that there is no substitute for an experienced appraiser but acknowledged that customers want the speed and cost savings automated valuations offer.

"For appraisers themselves, automated valuation models are a tool," he said. "That's all they are."

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