Preview (HQ Score™)

Product Overview

Automated Collateral Risk Scoring

Preview (LPS Score™) is an automated collateral risk assessment which assigns a risk rating to the underlying collateral valuation of a property using proprietary and public databases, including appraiser performance, area review history, ValueSure, as well as previous subject valuations, foreclosure data and regional economic risk indicators. It is used to determine the quality and loss potential of real estate collateral before a transaction is completed. Preview (LPS Score™) allows mortgage originators, secondary market intermediaries, dealers and investors to identify and manage collateral risk. Single orders are placed online at www.hanqual.com. Batch orders are submitted on Excel spreadsheet.

Market Indicators and Data Components of the Preview (LPS Score™)

ValueSure™
Valuation Solutions automated valuation model is a key component of the Preview (LPS Score™). Quality and quantity of comparable sale data is considered in the Confidence level and calculation of the high and low value range for subject property. The ValueSure™ estimate of value is compared to the valuation submitted by the client and a risk indicator is derived and used within the score. When the ValueSure™ model is unable to produce an estimate of value for the subject property, the score is produced using the remaining risk indicators, and the benchmark value for the forecasting component is based on the final risk score and the appraised value.

Valuation Solutions Proprietary Databases
Capitalizing on the broad range of public and proprietary real estate and appraisal databases available within the Fidelity National Financial family, the Preview (LPS Score™) considers several important risk elements, including a review of the subject's previous sales history, previous valuations on the subject property, appraisal review history from the subject's neighborhood, and specific appraiser review performance.

Regional Economic Data
Population density, median home values and median income levels are all factors that are considered in the valuation risk model. With regard to liquidity, the Preview (LPS Score™) incorporates several factors. First is the historical and recent volatility of prices in the neighborhood of the subject property. Second is the degree of homogeneity or heterogeneity of the neighborhood itself. Third, the current value risk is also dependent upon the subject's conformance or how typical or atypical the subject property is relative to the surrounding neighborhood.

Interpreting the results of the Preview (LPS Score™)
The Preview (LPS Score™) offers a fast and highly predictive tool to identify and manage collateral risk. The score identifies potential over-valuation of a value estimate based upon the company's vast residential property data sources and proprietary home price forecast indices and loan attributes. The result is a tool that provides consistent, objective and actionable information for mortgage originators, mortgage services, secondary market intermediaries and investors. The following is a breakdown of the score, along with some examples of recommended courses of action.

HIGH RISK SCORE (<600): Occurs when the evaluation process concludes that the risk of a current overvaluation is high. The courses of action typically recommended for these scores include: lowering the loan amount, ordering a more extensive valuation (2055, BPO, Appraisal), or declining the loan.

MODERATE RISK SCORE (600-699): Occurs when the evaluation process concludes that some elements of the risk of a current overvaluation are present, but do not meet the threshold of high risk. The courses of action typically recommended for these scores are dependent on other factors such as credit score, loan type, etc. If additional high-risk elements are present in these other factors, recommended courses are the same as for high-risk Preview (LPS Score™). However, if these other factors are presenting low-risk elements, no additional action is recommended.

LOW RISK SCORE (>700): Occurs when the evaluation process concludes that the risk of a current over-valuation is low. The recommendation for these scores is that no additional analysis is necessary.

For more information, please contact Valuation Solutions.

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