Michael Sklarz, CEOThe real estate market is on the edge of a rapid evolution— from spreadsheets and simple reports, to adapting to the entire Big Data analytics show. The use of Big Data in this particular industry brings an accurate presentation of the “whole consumer” picture, explicating data to find out who buys what, when, where, why and how. Collateral Analytics (CA), a company based in Honolulu, HI, develops real estate analytic products and tools to support financial institutions, institutional and retail investors, real estate brokers and agents, as well as property capital market activities.
Established on the foundation of empowering partners, investors and clients, CA provides clients with greater and faster access to information and the tools that they need to make more informed property investment decisions. “Our business is totally based on technology driven automated products to serve large lenders and other real estate market participants who need to get instant valuations for any home in the country,” states Michael Sklarz, the Chairman and CEO of CA.
In addition, CA provides funding and executive management support to incubate and develop early stage property technology applications. The company has been helping organizations for nearly a decade, with a primary focus on building and delivering Automated Valuation Models (AVMs), collateral and mortgage risk tools and related products with XML delivery, batch valuation processing and the application of sophisticated analytics to a wide range of real estate related databases.
One of the core products of the company on the Realtor side is, the CA Agent Market Wizard, which is a “wizard-based” tool giving real estate professionals the ability to easily produce a set of market analytic reports for buyer and seller presentations. The tool outputs charts covering a number of market indicators such as sales activity, average prices, months of inventory remaining and sold market time to name a few along with detailed chart descriptions. On the other hand, the CA Interactive AVM is designed for the expert real estate broker, providing a state-of-the-art online residential property valuation service that can be used during every step of the listing, purchase or valuation process.
On understanding the importance of mortgages, the company also places significant focus on mortgage modeling for the lending space.
Our business is totally based on technology driven automated products to serve large lenders and other real estate market participants who need to get instant valuations
“By virtue of taking periodic performance snapshots from all the mortgages that a lender has, CA provides a very useful process in monitoring the quality of a mortgage portfolio, and where it might stand under various future home price scenarios such as an overall drop of 10-20 percent,” comments Sklarz.
In this way, CA works closely with mortgage performance data, which are massive databases through which the firm gathers information about monthly payments histories of individual borrowers.
“We consider all this data and create predictive models in terms of whether a mortgage in the particular market for a specific borrower is going to continue being current, go into default, be refinanced, or paid off if the property is sold. We integrate these models with our AVM and home price forecasts to create a fuller picture of the value of an individual mortgage which is the building block for analyzing the lender’s overall mortgage portfolio,” explains Sklarz.
Ultimately, CA tries to state what mortgage rate should be charged on that loan, given all the different factors that go into it, like property location, down payment of the borrower, the type of mortgage that the borrower is getting and so on.
The longer term plan for CA remains to be agile and innovative. “We are a Big Data company, constantly dealing with very large databases and we want to explore the possibility to use our predictive analytics not just in real estate but other areas as well,” expresses Sklarz.