Valuation Analytix Introduces Damocles Credibility Assessment Engine

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Valuation Analytix introduced the Damocles Algorithmic Credibility Assessment Engine today, as a tool to analyze potential fraud in mortgage appraisal reports.

Valuation Analytix introduced the Damocles Algorithmic Credibility Assessment Engine today, as a tool to analyze potential fraud in mortgage appraisal reports.

The Damocles Algorithmic Credibility Assessment Engine is an automated appraisal review system that analyzes appraisals in their native formats for credibility risks that could trigger regulatory and investor liability, and checks for compliance with the Appraisal Foundation’s Uniform Standards of Professional Appraisal Practice (USPAP).

Valuation Analytix chief compliance officer and founding partner Robert Madsen developed the algorithm as support for his whistleblower case against Bank of America in 2011*, alleging the bank was creating fraudulent appraisals that affected both private investors and governmental programs. Madsen witnessed the fraud firsthand as an appraiser for Bank of America’s Landsafe Appraisal Services, and his claims were independently corroborated by The Department of Justice in 2012.

“Of the 10,000 appraisals the Damocles Algorithm has reviewed to date, we believe more than 40 percent show indications of fraud risk that could result in regulatory fines and liability,” Madsen said. “These numbers reveal a problem even larger than anticipated and they need to be addressed as they undermine the collateralization of broad tranches of investment products.”

The system, which was finished in July 2014, has been offered as a trial to the financial industry in recent weeks, allowing them to analyze up to 100 appraisals each at no cost.

“We are staunchly dedicated to transparency in mortgage appraisals,” said co-founder and partner Bill Murphy. “By offering this algorithm through http://www.ValuationAnalytix.com, we hope to increase transparency across the financial services industry, protecting investors and banks from unnecessary risk and exposure.”

To learn more about Valuation Analytix, visit Valuationanalytix.com or call (888) 776-8660.

  • Case 1:11-cv-04207-PGG filed Superior Court Southern District of New York

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