The INVIZEN model created for the Real-Time Underwriting (RTU) reporting program is predicated, in no small measure, upon certain empirical assumptions. By and large, these empirical assumptions stem from the RTU’s reliance upon the RTAF empirical assumptions because the INVIZEN model underwriting approach is driven by surveyed market evidence as a rule and not subjective decision-making criteria. The key empirical assumptions also include, but are not limited to, the following key assumptions:
- Transaction participants making material representations of fact will be verified through the VERIFY NOW Investment Fraud Deterrence Program of INVIZEN; and
- Property operations reporting will be provided regarding all materially-significant operating and non-operating events for a given reporting period to the INVIZEN RTS program monitoring system; and
- Credit underwriting’s reliance upon FICO scoring will continue to create the same problems visa-vie the resulting reliance upon subjective decision-making processes that are associated with the entirety of FICO scoring, thus rendering the crediting underwriting approach’s current guidelines under CREFC, more or less, subject to additional loss risk that would not otherwise have to be the case if liquidity testing were to be used instead of FICO scoring, whether this is the case in fact or not; and
- The INVIZEN underwriting model relies upon the premise that market forecasting cannot be made to be reliable and sustainable beyond the current 24-month window as a matter of historical precedent, whether this is the case in fact or not; and
- The INVIZEN underwriting model relies upon the empirical assumption that liquidity will be managed on an ongoing basis using the INVlZEN RTS program monitoring and forecasting proprietary approach that, by and large, serves to provide part of the means to help insulate the business from a total investment loss failure on an ongoing basis, whether this is the case in fact or not; and
- The INVIZEN underwriting model relies upon the requirement of sustaining a Forecast Zone liquidity test of the pro forma financial statements of a scale necessary to enforce the 24-month operating expense carrying liquidity test, whether this is the case in fact or not; and
- Collateral underwriting differs from CREFC guidelines, in that, the INVIZEN model assumes that as long as the market opportunity regarding the potential to generate future sales revenues of sufficient magnitude to sustain the underlying collateral value of the business’ assets using an income-approach valuation, then the collateral value of the business is supportable for the purposes of collateral underwriting with regards to providing assurance of repayment, whether this is the case in fact or not; and
- Capacity underwriting focuses on the market opportunity identified in the RTAF market feasibility analysis and the creation of the resulting pro forma financial presentation predicated upon the inclusion of the key empirical assumptions, findings and conclusions thereto as the basis for the capacity underwriting, whether this is the case in fact or not; and
- Default risk underwriting focuses on the fact that, as long as term risk default remains manageable, then maturity risk default would therefore never have the opportunity to be a materially-significant subjective investment risk, whether this is the case in fact or not; and
- Technical default risk underwriting focuses upon the assumption that all INVIZEN RTU underwriting analyses produced will result in the investments being qualified and becoming active participants in the INVIZEN RTS Investment Protection Program wherein technical default risks having a material significance to the transaction are reported to INVIZEN for periodic monitoring, whether this is the case in fact or not.
Additional empirical assumptions also apply. Some are set forth in our TOU and some are set forth in our more detailed reporting program disclosures.