Quality Control on Appraisals Case Study: Large U.S. Commercial Bank Leverages MAP AVM to Identify and Eliminate Appraisal Fraud

Client’s Challenge

  • The client, a U.Sbased commercial bank with a large residential mortgage portfolio, was facing concerns due to potential fraud with shortsale properties within its portfolio.
  • In order to address these concerns, the client required a modelgenerated market value to use as a second opinion on short sale appraisals.  The client determined that an automated valuation model(AVM) would be a perfect fit for their quality control business requirements. Five Bridges approached the client and identified MAP(MarketAssessed Price) AVM as a potential solution because of its speed and accuracy in generating market values for residential properties.

Our Solution

  • We worked with business owners to learn about their existing QC processes as part of the appraisal review, then identified an appropriate integration plan for incorporating the MAP AVM directly into the client’s existing workflow.
  • We provided a solution that included all known sales and listing transactional information for the subject property over a 10– to 15year span updated in real time to allow for listing fraud checks.
  • We provided ability for client to check the quality of appraiser comparable properties through automated results generated by the MAP AVP system.

Outcome

  • With the help of MAP AVM, the client was able to identify numerous cases of fraudulent appraisals within their portfolio due to the substantial irregularities in values.
  • The client was able to reduce the review process by 15% with the help of Five Bridges’ integrated solution set.
  • In addition to the shortsale group, the bank expanded the MAP AVM usage to other areas within Default Servicing for universal quality control process across different lines of businesses.