A new data tool from property valuation software company Veros promises to breakdown the affects of natural disasters at the parcel level, potentially offering invaluable information to lenders who have to make determinations about damage before issuing loans.
The tool identifies which properties in a given area have been affected by disasters such as earthquakes, flood, wildfires, volcanos, tsunamis and other disasters, Veros said in a statement. It analyzes mapping data, geocoding, and parcel boundary information, as well as satellite imagery, to identify which properties are affected.
Luke Ziegenmeyer, Veros Director of Product Management
This parcel-level degree of specificity contrasts with current practices, which typically involve the U.S. Federal Emergency Management Agency (FEMA) declaring a disaster at the county level. The problem with that approach, according to Veros, is that it casts too wide a net, flagging homes as part of a disaster area even if they haven’t actually been affected.
And that in turn, can halt loan funding on those properties because lenders have to confirm that a home is undamaged before issuing a mortgage.
“Since most mortgage lenders serve a broad or even national geographic area, they have limited ability to truly know whether or not a specific property is impacted by a disaster,” the company said.
A Veros spokesperson told Inman in an email that the company’s clients include “anyone with a vested interest in a property that is securing a mortgage or which has a mortgage in place.” That includes mortgage originators, home equity lenders and insurance providers, among others.
Veros was founded in 2001 and offers a suite of property valuation and risk assessment tools. Among other things, the company produces residential market forecasts, risk tools, and automated valuation models (AVMs). The company maintains partnerships with both large companies, such as IBM and Microsoft, and Fannie Mae and Freddie Mac.
The new parcel-level disaster data is available as a free add-on to the VeroVALUE service, which the company describes as an AVM that provides “realistic value ranges” for properties across the country. The company’s spokesperson said that Veros’ AVM reports typically cost between $15 and $20, though there are discounts available for ordering in volume.
Flooding in Louisiana in 2016 | Credit: The Advocate. Bill Feig
The new data tool may also be coming at an opportune time; recent years have seen a steady stream of natural disasters across the U.S., some of which have been at least partially fueled by climate change. Moreover, some experts believe changes to the environment are going to wreck havoc on the real estate industry in the future, flooding homes, worsening wildfires, and intensifying other phenomena such as storms.
A valuation tool that can parse the specific impacts of these events, then, stands to see growing demand in the future.
In a statement Thursday, Luke Ziegenmeyer — Veros’ director of product management — said that the new tool ultimately offers a quick way to “assess whether or not properties have been impacted by” disasters.
“Additionally, our data is continually updated as the disaster unfolds,” Ziegenmeyer added, “ensuring that our customers are always making their risk-based decisions with the most current information.”
