Fitch Ratings, New York, said it is "concerned with the used of non-full appraisals to value properties in declining markets."As a result Fitch has identified property valuation type as an additional factor in assessing the credit risk of underlying collateral in mortgage-backed securities. The agency believes that with automated valuation models, the risk of property overvaluation is great in declining markets. This is because the data relied upon in the model could be several months old. This is also true for desktop appraisals. Drive-bys are very limited in scope, which Fitch said hinders their accuracy. In markets the rating agency classifies as "weak or soft," Fitch will decrease the values of mortgage properties. This could require a higher level of credit enhancement for that loan. The current list of markets Fitch considers to be "weak" are Salt Lake City-Ogden, Utah; San Jose, Calif. and Denver. Soft markets are the Memphis metropolitan area; the Charlotte, N.C., metropolitan area; Albuquerque; Atlanta; Grand Rapids-Muskegon-Holland, Mich.; Detroit; the Cincinnati metropolitan area; Dallas; Greenville-Spartanburg-Anderson, S.C.; Akron, Ohio; Indianapolis; Dayton-Springfield, Ohio; The Cleveland metropolitan area; Columbus, Ohio; Toledo, Ohio; Baton Rouge, La.; San Francisco; Columbia, S.C.; Tulsa, Okla. and Houston.

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