The nation’s largest default insurer states that Reuters’ story contains inaccuracies. Specifically:
“The article implies that emili relies primarily on information provided by home sellers, does not look at the specific property and that it accepts this information without verification. This is not the case.”
CMHC notes that it uses four tools to evaluate properties, including:
the physical characteristics of the property (like square footage, lot size, age, style of the home, etc.)
the municipal property tax assessment
historical and current sales activity within the local housing market, and
prior sales activity of the property being assessed, when available.
In many cases, data is crosschecked among these varying sources.
Reuters goes on to speculate (somewhat blindly) that emili “could raise the risk of a devastating U.S.-style crash.” CMHC replies point blank that emili is “objective and consistent” and “does not contribute to higher home valuations.”
Emili is “continually updated” and “independently reviewed” by a third party, it says. (The company doesn’t state who that party is.)
In addition, “The lender is contractually responsible for ensuring valid data is submitted into emili…”
In our past experience, branch staff at some lenders have significant control over the input of this data.