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Red Bell Real Estate, LLC, a Radian subsidiary, was named among a select group of automated valuation model (AVM) providers by credit rating agency, Fitch Ratings, to supply AVMs in support of Fitch’s rating of residential mortgage-backed securities (RMBS) transactions.
“Red Bell is proud to offer an exceptional quality AVM that meets the high standards of Fitch Ratings,” said Eric Ray, senior executive vice president, Technology and Transaction Services, Radian. “It is exciting that Fitch has recognized Red Bell’s AVM offering, among its peers and we are thrilled that they are leading the way toward increased acceptance of AVMs in the marketplace. This recognition is also a testament to Red Bell, a subsidiary of Radian, as a unique company that uses proprietary technology, data and analytics to disrupt the real estate value chain.”
In recent years, Fannie Mae and Freddie Mac have both initiated programs that leverage AVMs in determining waivers for full appraisals. In addition, last month, federal banking regulators including the Federal Deposit Insurance Corporation (FDIC), the Office of the Comptroller of the Currency (OCC) and the Federal Reserve Bank, approved a change to banking regulation to allow AVMs to be used in mortgage lending on loans up to $400,000, an increase from the prior $250,000 de minimis limit. These actions by informed market oversight entities provide additional confirmation that the reduction of bias and improvement in accuracy of AVMs over manual products creates opportunity to help consumers achieve their dream of homeownership more quickly and more cost effectively.
Fitch’s announcement of Red Bell as one of its approved vendors for RMBS came as it published new RMBS rating criteria and a report, “AVMs Can Play a Helpful Role in U.S. RMBS.” Fitch will now allow AVMs to be used as secondary valuations for due diligence where a full appraisal is already present. AVMs may also be used as the primary valuation for second liens and seasoned performing loans.
