Ensuring the use of objective language is crucial for appraisal reports. Both lenders and the GSEs have introduced tools and programs designed to detect the presence of subjective, potentially biased words or phrases within appraisal reports.
Appraisal ScorecardX helps lenders quickly and easily detect potential bias.
Xactus’ Appraisal ScorecardX utilizes advanced technology to conduct automated appraisal reviews that catch any issues with appraisal completeness and assure compliance which, in turn, reduces your risk. This innovative tool also helps by analyzing key phrases or words, enabling you to flag words and phrases that are not necessarily related to bias which we call “indicative words.”
For example, lenders are using Appraisal ScorecardX to alert underwriters to potential issues by flagging words like “deterioration” or “damage” which may indicate below average property conditions and raise questions about buyback liability, or an issue with the property itself such as structural imperfections in the foundation or walls.
Appraisal ScorecardX allows you to:
- Customize the key word ruleset that may infer racial or another type of bias
- Identify key terms your organization, underwriters and/or investors require be present in the appraisal report
- Add more indicative words that may alter the perceived property value
Please note: The Indicative Words tool only partners with the enabled Appraisal ScorecardX feature.
How Appraisal ScorecardX Works
This tool helps reduce appraisal bias by better informing the appraisal reviewer or underwriter on loan decisioning.
You can choose to have an Appraisal ScorecardX automatically submitted with every appraisal, or you can run it manually on a case-by-case basis. It is a quick, automated process – you don’t even need to upload the appraisal as it is all tied together within the platform.
Lenders also use Appraisal ScorecardX for:
- Reconsideration of Value (ROV) or disputes – Speed up the process by providing additional comps to the reviewer
- Annual portfolio reviews – Quickly obtain property values on your current portfolios
For more information, contact your strategic account manager or email [email protected].