ESTABLISH A RECONSIDERATION OF VALUE (ROV) POLICY AND PROCEDURE

Establish a robust ROV policy and procedure if one is not already in place. The ROV process allows borrowers and other relevant stakeholders to challenge an appraisal value if they believe it is unjust. Clear guidelines and a streamlined process should be established to facilitate thorough and impartial reviews of appraisal valuations.

CONDUCT FIRST-LEVEL AND SECOND-LEVEL APPRAISAL REVIEWS

Implement a comprehensive appraisal review process, consisting of both first-level and second-level reviews. These reviews should be conducted during qualification and underwriting processes as well as in the quality control space. Undervaluation and overvaluation risk flags as well as CU / LCA risk scores equal to or above 4 should be thoroughly investigated, preferably with a second level review by a more senior appraisal reviewer.

ESTABLISH AN APPRAISER SCORECARD AND MONITOR THE AQM LIST

Develop an appraiser scorecard that assesses appraiser performance and tracks key metrics related to quality and unbiased valuation. The scorecard can include factors such as accuracy, consistency, timeliness, and appraisal language. You should review for prohibited and subjective language within the appraisal that could indicate potential bias. Additionally, monitor the Appraisal Quality Management (AQM) list to identify appraisers with potential performance or quality issues.

CHECK FOR DISCIPLINARY ACTIONS FOR ASSIGNED APPRAISERS

Perform thorough due diligence by checking for any disciplinary actions or complaints against any assigned appraisers. This verification process can be conducted through state regulatory agencies, professional appraiser associations, or other relevant industry bodies. Appraisers with a history of disciplinary action should be excluded from consideration.

AGGREGATE APPRAISAL-RELATED DATA

Establish mechanisms to aggregate and analyze appraisal-related data and findings to identify potential trends and patterns indicative of discrimination or bias. By reviewing the data collected from appraisal reviews, ROV requests, and other relevant sources, you can identify any systemic issues or patterns of biased valuation that need to be addressed.

Preventing and detecting bias in appraisal valuation practices requires a proactive and vigilant approach from mortgage lenders. By implementing the recommendations outlined above, lenders can foster fairness, equality, and unbiased lending practices. This entails establishing robust policies, conducting thorough appraisal reviews, monitoring appraiser performance, and analyzing appraisalrelated data.

Eliminating bias in appraisal valuation practices is both morally imperative and essential for the long-term sustainability of the mortgage lending industry. Through increased transparency and a commitment to fairness and integrity, lenders can enhance their reputation, attract diverse borrowers, and contribute to the stability and growth of the housing market.

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MORTGAGE SESSIONS:

SEPTEMBER 18 AND 19

BUSINESS/ COMMERCIAL LENDING SESSIONS: SEPTEMBER 20

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Location: The St Paul Hotel, 350 Market Street, St. Paul, MN

*Hotel reservations are to be made separate from conference registration. To reserve a room, call The Saint Paul Hotel at 800-292-9292 and reference the Servion 2023 Lending Conference OR visit saintpaulhotel.com select your dates and use code 91823SERV with the GROUP/BLOCK drop down

In a world where everything can be so rushed, seeing your team care about and communicate with our members in the same way we would is something I am so grateful for.

We have switched over to Quality Control with Servion and Brock Miller (Quality Control Manager) is so on top of everything! He reviewed our policy and has been very helpful with any question. He’s super organized and fun and friendly too. Hard to come by in the QC world!