Loan Valuations

Appraisals for Loans

A number of banking groups in Italy and worldwide use the Praxi loan valuation service.

Praxi mortgage loan appraisals are compliant with both international standards and the national regulations governing the sector, and we subscribed to the “ABI Guidelines for the valuation of real estate properties used as guarantees against credit exposure” as soon as they were published.

Appraisals determine both the market value of properties for collateral purposes and their new-for-old-value for insurance cover purposes. This approach not only supports the normal credit issue process, but also helps to “certify” the consistency of the real estate securities vis-à-vis rating agencies and investors for any subsequent securitisation transactions.

With a view to guaranteeing an accurate, exhaustive service, we have developed a set of systems and procedures designed to verify, validate and monitor the process. This is the real added value banks can expect from Praxi Loan Valuations, over and above the significant advantage offered by outsourcing the practical and organisational aspects of the process. This is particularly important in a period when supervision in the banking system is moving increasingly towards centralisation, given the importance the new regulations rightly place upon the reliability of appraisals for determining the type and extent of risk taken on by banks.

The distinctive elements of our service are:

  • systematic, centralised control over each appraisal, focusing on the fair value, significance and accuracy of the elements of the property described and identified, and formal compliance with established schemes
  • continual implementation of the property value database, managed using a georeferencing tool
  • systematic tracking of each step in the process and systems to ensure compliance with timing
  • professional liability assumed by Praxi for all aspects of the process
  • systems for reporting to the bank.

Praxi Loan Valuations has a dedicated IT support platform, developed throughout by experts in our IT Divisions. This highly specialised, fully customised platform assists us every step of the way, thanks to a complete range of tools that include a georeferencing system to optimise the use of the property value database. An advanced disaster-recovery system guarantees data protection and business continuity for client banks.

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Appraisals for Finance Lease

While the valuation of properties for finance lease operations is similar in many ways to appraisals conducted for mortgages to be issued by banks, there are a number of differences, due to some particular features specific to finance lease agreements.

The main difference, which has a significant, direct impact on the valuation, is that the finance lease company becomes, to all intents and purposes, the owner of the property, until the contract expires and it is redeemed by the borrower (who, as per the contract, may choose not to redeem the property, in which case ownership remains with the finance lease company).

Since property leasing entails a significant financial commitment (fixed capital) and legal responsibility, the appraisal drafted at the preliminary examination stage must take appropriate, exhaustive account not only of the essential elements strictly regarding appraisal, but also issues concerning ownership, compliance with urban planning and building regulations, certification of systems, environmental protection, etc.

Praxi offers finance lease companies a dedicated, professional team with a variety of skills necessary to tackle the full range of issues set out above.

For managing the appraisal process and engaging with corporate clients, from initial assginment to delivery of the completed appraisal, Praxi Loan Valuations has a dedicated IT support platform, developed throughout by experts in our IT Divisions. This highly specialised, fully customised platform assists us every step of the way, thanks to a complete range of tools that include a georeferencing system to optimise the use of the property value database. An advanced disaster-recovery system guarantees data protection and business continuity for client banks.

As regards appraisal content and format, PRAXI generally follows the Assilea standards, which it is willing to customise to meet any specific requests finance lease companies may have, so as to ensure a perfectly tailored service.

Thanks to our widespread presence throughout the country, with ten offices in Italy, and the professional skills of our experts, PRAXI is able to conduct appraisals on properties of any size or type, located anywhere in Italy, guaranteeing a consistent approach and fair values within the deadlines promised.

PRAXI also takes care of finance lease operations “under construction”, both at the initial stage and throughout the building process, drafting regular progress reports before verifying the work has been completed properly and in compliance with the pertinent regulations.

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Non Performing Loans

PRAXI assists lenders and specialised investors in carrying out technical and financial analysis and in verifying the feasibility and sustainability of options for the optimisation of properties with non-performing mortgages and finance lease contracts.

The more severe the economic crisis becomes and the longer it persists, the more the volume of impaired and non-performing loans rises. Judicial enforcement is a notoriously long road to go down, and the outcome is highly unsatisfactory for creditors.

PRAXI’s wide-ranging expertise in the real estate sector allows us to offer clients more than just standard valuation and due diligence on properties. Our efforts are strongly geared towards real, practical solutions, in cooperation with the borrower where feasible.

Thanks to our widespread presence all over the country, PRAXI can conduct a swift, efficient analysis of large NPL portfolios, applying analysis and sampling criteria able to optimise the use of resources, thus guaranteeing consistent, reliable results.

At the same time, we are able to conduct accurate, detailed analyses of individual properties, examining all the possibilities they offer and how they can be optimised, advising clients on the options most liable to be successful and with the best economic prospects.

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