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ISCOVER
By: Staff Reporter
QBE LMI has launched an Automated Valuation Model (AVM) that has the ability to identify fraudulent property valuations.
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According to QBE LMI’s chief executive officer Ian Graham, fraudulent overstated property valuations cost the Australian Banking and finance industry millions of dollars.
In response, the company integrated the valuation model into its core underwriting process to provide a second point of validation of more standard valuations.
Integration of AVMs into QBE LMI’s core underwriting process has been achieved through real-time XML interface for individual applications and via a batch process for bulk lenders’ mortgage insurance requests. For individual applications the underwriters are notified of an exception when the AVM result causes one or more of the QBE LMI credit rules to fail.
When an exception is identified the application is escalated to a senior underwriter who has access to a variety of tools (online comprehensive property information services and independent professional valuers) to determine if there are any anomalies in the property valuation.
"We are confident that our use of AVMs, in combination with our credit risk management tools, will significantly improve the quality of our underwriting decisions and significantly reduce our exposure to fraudulent or overstated property valuations in the market,” Mr Graham said.
