Recent global market turbulence stopped securitisation markets dead, although a market is beginning to develop again for residential mortgage backed securities with solid underlying assets, albeit at a cost premium to a year ago.One consequence is that the underlying make-up of a RMBS will now be more closely scrutinised than in the past, with buyers and sellers of securitisation looking beyond the valuation of the underlying asset, to the method of valuation.Electronic valuation of properties, viewed by some as inaccurate, can at least revalue the underlying assets of a securitisation during its life."In securitisation, what has historically happened is that people report the loan to value ratio (LVR) on an ongoing basis, but what they are really reporting is the loan divided by the original valuation," said Ben McCarthy, head of structured finance at ratings agency Fitch."Our view is that electronic valuations are most useful as a surveillance and fraud detection tool, as opposed to an underwriting tool."We are not confident that the data set will be available to make it a reliable source."On a portfolio basis the AVMs probably work out, which is why as a surveillance tool they work well, but on an individual property potentially they could be wrong as they are based on averages."McCarthy adds that there is no concern for AVMs valuing properties within upcoming securitisation, just as long as the property has a low LVR and is in a densely populated area."We don't get concerned when the LVR is very low, say less than 50 per cent."As they get to higher loan to value ratios, we would actually discount the valuation in our models. If the AVM said the value was $100, we might reduce the value to $90 for the purposes of our analysis."The expectation with these sorts of things is, as they prove themselves, the quantum of that haircut could be reduced over time."It's a risk assessment. If a property with a 40 per cent LVR in a densely populated area is out by ten per cent, does this make a difference to the risk? Probably not."When reviewing securitisations, Fitch receives the valuation on every individual property, but the valuation method is not always included.McCarthy would potentially find more information useful, but agrees there is a point where it is questionable whether more information is useful or not, if there is no value added to the analysis."The global policy has been enough for us to work off, so there hasn't been the need for that level of detail."If there is a divergence, we will need to capture that."Our view is that a full valuation is better at all times."