EVR

Electronic Valuer Review (EVR) is a more efficient and cost effective way for banks and other lending institutions to carry out residential mortgage security assessments.

EVR is a risk containment, quality control and cost control process that puts more data in the hands of qualified valuers for their analysis and risk measurement.

It was designed in response to the banks’ need for certainty and accuracy in security assessment, necessitating new process, checks and balances, and an audit capability.

Valuers, who are central to the EVR process, validate electronic data and conduct other checks that may include an external property inspection. A full internal inspection is mandated when irregularities or anomalies trigger valuer uncertainty about the assessment.

EVR was designed primarily to address the middle tier of risk, that below the high-risk tier that requires full internal inspections.  

It has been comprehensively piloted and trialled in the property marketplace and shown to be highly accurate and predictable. Against Full Internal Inspections, it conforms to within +/- 10%, 95% of the time – and with a standard deviation of less than 10 per cent.

EVR assessments have been proven to very closely reflect Full Internal Inspection valuation results.   


What EVR is not

EVR is not a statistical data model. A model is a system developed by forecasters who collect general market data and apply a scaling factor to all properties based on this data. They do not use trained valuers or any type of valuation method.

Central to the functioning of EVR is the intrinsic role of the trained valuer using traditional valuation method; only valuers can conduct and return an EVR security assessment. 

EVR is designed to replace a system that banks have long relied on – restricted valuations (also known as ‘kerbsides’). It does this by  providing a much more rigorous assessment process that is auditable.

EVR streamlines the security assessment process by using technology to assist valuers gain access to the right  information quickly; by rigorously applying checks and balances; and by creating an audit path for the lender on how the assessment was derived.

So, while EVR is faster and efficient, it is not radical in its approach, uses only trained Valuers – and contains risk to a very tight and predictable range as a result.

Features And Benefits | Back to Top

Features

• Use of proven valuation method.
  
  
• Only selected, trained and local valuers may conduct an EVR assessment.
  
  
• Automation of ‘best practice’ valuation methods.
  
  
• EVR contains 12 data and process layers designed to create certainty and accuracy in the security assessment.
  
  
• The valuer is automatically supplied with electronic data – more information than is currently required for a full internal valuation.
  
  
• Customer contact and verification used in risk-checking procedures.
  
  
• Comprehensive risk analysis and audit.
  
  
• Incorporates the lenders’ risk and lending policy guidelines.
  
  
• Full decision trail and audit trail to enable the lender to check the reasoning behind any given assessment.
  
  
• Data tracking and audit capabilities – a departure from error-prone and non-auditable ‘faith-based’ procedures.

Benefits

• Faster turnaround times for security assessments.
  
  
• Vastly improved risk and quality control during the ordering and processing of security assessments.
  
  
• Banks can elect when to order an EVR security assessment and what validation it should impose.
  
  
• Complements existing internal inspections and other valuation practices.
  
  
• More accountability than with existing non-auditable trust-based procedures.
  

Banks Endorse EVR | Back to Top

EVR has the seal of approval by Australian banks and mortgage insurers.

A major Australian bank, which partnered the development of EVR, has adopted the system after conducting an intensive pilot and trial. Other banks have verified the results with their own trials.

Using stringent success criteria, the bank tested 3200 EVRs against a known control group of internal inspections conducted by rival valuers. The properties represented all property types, topographic locations and disparate metropolitan regions.

The results showed a uniformly ‘tight’ correlation between EVR assessments and the full inspections against which they were measured.

Most significant of all was the very low variants in the assessments produced. EVR assessments returned fall within a standard deviation of 10% of full internal inspections.

The results continue to provide lenders with proof of the certainty and predictability of an EVR assessment. This certainty of ‘spread’ is as important to the bank as the overall accuracy of the answer. Other assessment systems cannot match the very tight and predictable spread of EVR assessments.

Below are actual test results that highlight the very close correlation between full internal inspection valuations and the EVR assessments of the same properties. Together these factors continue to make EVR a low-risk alternative to traditional high-cost lender valuations such as kerbsides and full internal inspections.