New Disaster Areas Included in Automated Valuation Model Reports

Below are the latest Federal Emergency Management Agency (FEMA) disaster areas, as automatically reported to users of ValuePoint4, PowerBASE, Home Price Analyzer (HPA), and Property Analytical Statistical Summation (PASS) automated valuation models (AVMs).

Ohio
The following counties were declared FEMA disaster area 1656 on August 1, 2006
Lake Geauga Ashtabula

Texas
The following county was declared FEMA disaster area 1658 on August 15, 2006
El Paso

New Mexico
The following counties were declared FEMA disaster area 1659 on August 30, 2006
Otero Dona Ana

Indiana
The following counties were declared FEMA disaster area 1662 on October 6, 2006
Lake Vanderburgh

A message included with each AVM report notifies users when a subject property is in a county declared a natural disaster area by FEMA and provides the FEMA code for the disaster along with the effective date of the declaration. The message is shown in the AVM results for a six-month period from the effective date.

The FEMA disaster code is intended to help users find out more information about the disaster when referencing the FEMA website (www.fema.gov). Users of the Vector collateral risk management platform may use Vector's FEMA disaster-based exclusionary tables. These tables allow clients to limit AVM use in disaster areas and facilitate ordering of traditional valuations.

AVMs are excellent tools to assess the value of a residential property under many circumstances; however there are times when AVMs should be used with caution. All AVMs make three major assumptions:

1. The property actually exists
2. The property is in average condition
3. There are no external circumstances, either positive or negative, impacting the value of the subject property

If any of these assumptions are false, or have a strong probability of being false, then the validity of the valuation is in jeopardy. When FEMA makes a disaster declaration for a given county, the property damage can be catastrophic. More specifically, residential homes may be severely damaged and the assumptions above may not be valid.

For further information, please contact Robert L. Walker, CMB, CMT and executive vice president, collateral solutions, for First American Real Estate Solutions, at 714-250-6684; or by email at robwalker@firstam.com.

First American Real Estate Solutions is a member of The First American Family of Companies and America's largest provider of advanced property and ownership information, analytics and services. First American RES' database covers more than 2,900 counties representing 98 percent of the United States population. With more than 600,000 users nationwide, First American RES products are used by companies to improve customer acquisition and retention, detect and prevent fraud, improve mortgage transaction cycle time and cost efficiency, measure the value of residential and commercial properties, identify real estate trends and neighborhood characteristics, track market performance and increase market share. First American RES is a joint-venture company 80-percent-owned by The First American Corporation and 20-percent-owned by Experian. More information about First American RES can be found on the Internet at www.firstamres.com.