Data, analytics and technology provider Veros Real Estate Solutions announced a solution for lenders specializing in Property Assessed Clean Energy, or PACE, loans in the state of California, where new compliance requirements went into effect on Jan. 1.
VeroPACE is available through the company’s VeroSELECT ordering platform and will generate, analyze, rank, and report the multiple automated valuation models now required for PACE lending by California’s AB 1284 and the companion State Senate Bill 242, the company explained in a press release.
"The passage of this legislation significantly changed the valuation process for PACE loans, which are used to finance greater energy efficiency in homes,” said Veros VP of Sales Rob Walker. “Historically lenders could process a PACE loan in California using the results of a single AVM, but they now need three AVMs and must use a new method of calculating the final value."
The company explained that AB 1284 intends to enhance PACE underwriting by requiring lenders to obtain the three AVMs from a third-party vendor, then choose the one with the highest confidence score and calculate the midpoint of that AVM's high-low value range. The result of that is combined in a report with data from the three AVMs and becomes the valuation submitted with the PACE loan application.
"Ordering three AVMs on the same property can be difficult," Walker added. "And because different AVM providers have different methods of producing confidence scores and values, the mid-range requirement has presented some significant challenges for many PACE lenders. Also, if lenders cannot get three AVMs, they have to get an appraisal, which will add time and cost to the loan application process. To combat this, lenders need to achieve high AVM hit rates."
"The good news for PACE lenders who are struggling with this new compliance requirement is that VeroPACE handles the entire process for them," said Luke Ziegenmeyer, director of product management at Veros. "And, if need be, we have an optional add-on for VeroPACE users that can facilitate the request and delivery of appraisals as well."