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Boost quality control with data and analytics for appraisal reviews

Oct 13, 2023

The quality and credibility of property valuations has become a hot topic in real estate, and lenders have not always had reliable tools to help manage collateral risk in their underwriting and quality control mechanisms. Simply put, many financial institutions have lacked trust and confidence in the appraisals submitted in conjunction with mortgage applications.

Identifying and managing potential compliance violations, property eligibility, overvaluation or overall appraisal quality can be challenging for many financial institutions. One solution that can address these concerns is a free tool from Fannie Mae called the Collateral Underwriter (CU).

The technology has been available to both Fannie Mae sellers and non-seller correspondent lenders since 2015. Now, Fannie Mae is in the process of approving quality control vendors to use the technology.

How does it work?

CU leverages a database of over 50 million appraisals that includes a trove of market data and advanced analytics to help lenders assess and manage their appraisal portfolios, incorporating:

  • Alternative comparable sales
  • Market-level metrics
  • ZIP Code and MSA-level market trends
  • MLS and public records
  • Peer adjustment data
  • Aerial imagery
  • Construction records

The benefits of CU can be game-changing. It provides immediate, real-time feedback and helps your organization validate or dismiss potential red flags.

Collaborative approach

During your appraisal review process and during a potential prefunding quality control review, you can avoid unnecessary requests to the appraiser while enabling more targeted, productive follow-ups. By flagging potential issues early in the review process, reviewers can work in tandem with appraisers to rectify discrepancies and improve the accuracy of property valuations. This collaborative approach fosters a culture of continuous improvement, leading to higher-quality appraisals across the board.

Traditional methods of appraisal review often rely on manual examination and subjective judgment. CU, on the other hand, leverages data-driven analytics, streamlining the review process and allowing for a more comprehensive assessment of property valuation. This efficiency not only saves time but also enhances the accuracy of quality control (QC) evaluations.

CU's analytics engine is adept at identifying appraisals that carry an increased likelihood of property eligibility issues and valuation discrepancies. This capability enables QC providers to prioritize their efforts, focusing on appraisals that require closer scrutiny. By zeroing in on high-risk cases, QC vendors can allocate resources more effectively, ensuring that potential issues are addressed promptly.

By leveraging CU's comprehensive dataset, QC vendors can navigate the complex landscape of real estate with confidence and precision. CU empowers QC vendors with a wealth of data and insights derived from its sophisticated analytics engine. This data-driven approach enhances the accuracy of appraisal reviews, enabling QC providers to make informed decisions regarding property valuation and risk assessment.

Don't let outdated methods hold you back. Exploring the potential of Collateral Underwriter can help you stay ahead in the dynamic world of real estate valuation.

How Wipfli can help

Wipfli’s secondary market quality control services are performed by seasoned lending professionals who come from diverse backgrounds and areas of experience. Our team of QC professionals  draws from deep knowledge and best practices to give institutions confidence in their processes and decision-making. Contact us to get started.

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Andrew Morgenroth
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