Altos releases forward looking housing valuation tool

Altos Research launched a new technology product to give investors forward looking insight on changes in home prices.

Released as part of its AltosEvaluate Mortgage Analytics Suite, the Forward Valuation Modeling (FVM) forecasts prices changes in each local market over the next 3,6, and 12 months based on the strength or weakness of any given local real estate market thus improving loan and pool level analytics for more precise asset pricing.

“Altos clients know that real-time housing data is vital to understanding distinct local markets and is rich with leading indicators of future home price changes. They’ve asked us to apply our analytical expertise to know more precisely how much to adjust housing asset valuations,” said Michael Simonsen, CEO of Altos Research. “That’s exactly what the FVM does. With the power of the FVM technology, you learn how much to discount, or increase, an asset’s value in the coming year – and adjust your bids accordingly.”

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The company said the FVM is a great fit for asset managers, REO managers, originators, service providers, or anyone who needs to know the future of mortgage assets.

“We strive for greater clarity and insight for our asset management clients,” said Ken Blevins, Jr, president and CEO of PMH Financial. “Using the FVM lets us give our clients not only a current valuation, but also a view of how that home price is likely to change in the next three to twelve months.”

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  • From the days of finding water with divining rods to the era of predicting oil reserves with the accuracy computer programming allows, projection and forecasting tools have improved markedly. However, what these tools have never predicted with any accuracy at all is the probability that oil reserves could be cut off in the Suez Canal by Egyptian internal turmoil and oil production in Nigeria could be cut off by rebel uprisings.

    Only someone who is willing to be classified as imprudent would not welcome better forecasting tools. Where the problems come is in refusing to acknowledge trends based on poor assumptions. The overreliance on prognostication tools has recent history. The account of the “wisdom” of Wall Street and the problem of overreliance on prognostication tools is fully exposed in the book “The Big Short.” Enron, Madoff, WorldCom, and the other financial scandals of the last few decades should serve as a real warning that commonsense should be the rule of the day, not unbridled blind reliance on mathematical modeling tools or the alleged results of those tools.

    No one in management wants to be criticized for being a maverick BUT why would lending management continue to walk down the road of loosening underwriting standards claiming that the market will be fine? It seems many in the mortgage industry intentionally cast a blind eye on this growing sore. No prognosticating tool can detect that kind of irrational behavior and push it into its analysis of the market.

    So congratulations on creating yet another forecasting tool but caution regarding overreliance on such tools alone should be the rule of the day.

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