5.9 Security Valuation

• To obtain formal approval of mortgage insurance cover, a valuation that has been prepared in accordance with Genworth's Valuation Minimum Standards is required from a suitably qualified valuer. Upon receipt of the valuation, Genworth LMI Underwriting Policies, as detailed below, must be verified against the valuation
• For a valuation to be acceptable to Genworth the following important components must be included:
  • Must be less than 90 days old
  • Must provide at least three acceptable and recent comparable sales of similar properties
  • The valuation of a security is not to include any component for GST cost
  • The valuer must state that the security property is suitable for mortgage lending purposes and may be relied upon by Genworth
  • Must be based on existing condition of property and/or the on-completion value of proposed construction. A separate value should be provided for the land and improvements, except where strata title properties are involved
  • The valuer should comment on the demand for similar properties in the current real estate market.

Note: Special arrangements may be approved for various Lenders, the conditions of which may vary subject to the requirements of the Lender.

5.9.1 Standard Valuation

• A standard valuation report should provide a brief description of the proposed security including the location and surrounding area, the size and construction, type of improvements, recent comparable sales, and the condition and marketability of the property. The valuation should contain detailed information on the following:
  • Locality
  • Improvements
  • Valuation.
• Genworth prefers the API Property Pro Pro-forma Report template developed specifically for residential mortgage valuation work.

Locality

• When looking at a valuation and assessing a security property it is important to consider the locality of the property

• Flood prone properties may be acceptable subject to certain floor height restrictions
• Any property located in an areas zoned for commercial or industrial development is not acceptable.

Improvements

• This term generally relates to the physical building on a block of land. It refers to any fixture that improves a vacant block of land
• The property should be well maintained and in good saleable condition. Utility areas should be relatively modern. Suggested repairs or renovations should be detailed and costed.

5.9.2 Valuer General's Assessment

• This type of valuation is one provided by the Valuers General office and is updated periodically
• This valuation is used by local government authorities in assessing a property owner's rates
• Lenders are required to hold a copy of the document disclosing the VG figure, which is to be certified (by the Lender) to be a true copy from an original.

Note: Where the VG document does not indicate whether the land is improved, the security will be deemed to be vacant land and the loan must not exceed the following parameters.