ADDP: Appraisal Defect Detection and Prevention

I am excited about the responses received from various lenders and AMCs (Appraisal Management Companies) inquiring about ADDP. As lenders are pushing for excellence in quality control by implementing loan quality initiatives, more focus is being placed on the collateral side of underwriting which is the premise of ADDP. ADDP is the methodology for improving appraisal quality and reducing loan defects that are associated with mortgage appraisals. AMCs and lenders should address in their Appraisal QC Plan in order to address appraisal defect detection and prevention.

Reduce Mortgage Repurchases with Appraisal Defect Detection and Prevention

Now that many mortgage repurchase demands evolve around collateral and the defects on the appraisal, one can understand the importance of ADDP and the changes that are necessary in the appraisal process that are necessary to reduce costly repurchase and put backs.

Appraisal QC Plan should include Appraisal Defect Detection and Prevention

The lenders responsibilities are great. The lender must continually evaluate the effectiveness of the Quality Control Plan and monitor the adherences of the plan. ADDP is just one part of the loan quality initiative in the Quality Control Plan to fulfill Dodd-Frank and interagency QC requirements for collateral.

Pre-Funding QC should include Appraisal Defect Detection and Prevention

Appraisal Defect Detection and Prevention (ADDP) is an invaluable tool for the lender for detecting appraisal errors, defects and appraisal fraud. ADDP provides a comprehensive automated regulatory appraisal review that included appraisal compliance and appraisal fraud checks. The ADDP pre-funding QC on collateral automatically flags properties that may be overvalued or deviate from the neighborhood norm.

ADDP

• Produces an instant report of "red flags" in the appraisal prior to manual review.
• Provides a list of potential appraisal issues, inconsistencies, and contradictions allowing the lender to investigate and clear the issues at the pre-funding stage!
• Provides recent and historical comparable area sales as well as current listings
• Provides real property characteristics, legal description, sales history, county tax information
• Provides Distressed Sale indicators showing past, current, and pending foreclosure and other distressed sale activity in the area

QMS commitment to the lender using ADDP is... QMS will provide free mortgage repurchase defense or mortgage put back rebuttals regarding loan collateral where ADDP was used.

Other post closing quality assurance audits may include the following: