CMHC is now defending its Emili against an onslaught of criticism the system’s database routinely overvalues properties by as much as 5 per cent to 15 per cent.
We have “the most comprehensive database in Canada, including property information on approximately eight million properties," writes the Crown Corp in a statement issued Thursday. "CMHC looks at the specific characteristics of the property in question.
"This includes the physical characteristics of the property, the municipal property tax assessment, historical and current sales activity, and prior sales activity of the property being assessed, when available.”
The defensive move comes on the heels of the release of documents obtained by access to information requests and detailing bank and default insurer concerns about CMHC’s automated system Emili. The charge is it relies on flawed data and routinely overvalues properties.
Mortgage brokers were among those consulted for the report, although lenders appear to have registered the moiety of concerns.
Still, brokers commenting on a MortgageBrokerNews.ca story Thursday shared their own misgivings about the system and its effects on clients.
Automated valuations “are awful,” writes one broker. “Anyone who received their MPAC assessment recently can attest to that.
“Appraisals, though more costly, are far more accurate – they take into account more relevant details that can only be observed by a human being in person.”
That notwithstanding, many mortgage professionals are concerned the pendulum may now swing back to an era when borrowers were often entirely dependent on the “drive-by valuations” of some appraisers.
“My biggest concern is when an insurer orders the appraisal and in too many instances, instead of it going to a local appraiser who knows the market in their area, it is assigned to an out-of-town appraiser,” offers another MortgageBrokerNews.ca reader. “In many instances this has caused the appraisal to come in low and this really applies to the drive-by appraisals.”