AI Uncovers $27B Risk in Appraisals: Restb.ai White Paper Finds Flawed Condition and Quality Adjustments

/EIN News/ -- DALLAS, May 07, 2025 (GLOBE NEWSWIRE) -- A new Restb.ai White Paper released today analyzes more than 1,200 real estate appraisals to reveal for the first time over $27 billion in potential hidden financial risk tied to flawed property condition and quality adjustments – exposing a major blind spot in the real estate and mortgage ecosystem.

The new Restb.ai study uncovers widespread inconsistencies and transparency issues in how appraisers assess and adjust for a property’s physical condition and quality, two factors that directly impact property valuation, borrower equity, and lender risk. Crucially, the White Paper provides deep insight into how appraisers can leverage computer vision to mitigate risks using objective image-based scoring to detect and justify condition and quality adjustments with greater precision.

The study's findings echo recent warnings from Fannie Mae, which identified condition and quality misreporting as one of its top three appraisal quality concerns.

“The scale of flawed condition and quality adjustments in appraisals is bigger than most people realize,” said Nathan Brannen, Chief Product Officer at Restb.ai. “Most AMCs and lenders simply don’t have a quick and easy way to check for these issues, so they ignore the problem and hope for the best. AI finally offers a solution to efficiently manage this risk.”

Unlocking new findings from appraisals
Using its proprietary computer vision technology, Restb.ai analyzed 1,271 appraisals and 6,495 comparable properties and uncovered:

• 1 in 3 appraisals contains a major risk tied to condition or quality adjustments that don’t match the actual property.
• Nearly 3 out of 4 appraisals show warning signs of inconsistencies that could lead to inaccurate valuations.
• Most homes were lumped into just two categories for condition (86%) and quality (97%), making it difficult to identify the real differences that could affect property value.
• Adjustments were made even when properties had identical condition or quality scores – 11.8% for condition and 5.3% for quality – raising questions about consistency and transparency.

The study warns that these patterns can lead to systematic overvaluations or undervaluations, which carry legal, reputational, and financial risks for lenders and appraisal management companies.

Supporting appraiser empowerment to reduce risk
The Restb.ai White Paper on quality and condition findings come at a pivotal moment as the GSEs advance appraisal modernization and shift toward component-based scoring. The study provides indisputable statistical evidence demonstrating that AI-powered computer vision is a vital resource for appraisers – helping them tackle one of the industry’s most persistent and historically costly challenges with greater consistency, precision, and confidence.

“Automated, scalable risk detection is no longer a luxury – it’s now a necessity,” said Tony Pistilli, President, Valuation at Restb.ai. “By integrating computer vision into appraisal workflows, high-risk files can be flagged by lenders earlier, protect against repurchase claims, and promote fairer outcomes for consumers.”

The White Paper shows that implementation of AI tools can improve appraisal quality, enhance compliance, and align with evolving GSE requirements, ultimately supporting a more stable and equitable housing finance system.

A free copy of the Restb.ai White Paper on conditions and quality is available at blog.restb.ai/impact-of-condition-and-quality-on-appraisal-accuracy.

About Restb.ai
Restb.ai, the leader in AI-powered computer vision for real estate, provides image recognition and data enrichment solutions for many of the industry's top brands and leading innovators in the mortgage industry with AI solutions for valuations and appraisals. Its advanced AI-powered technology automatically analyzes property imagery to unlock visual insights at scale – including property conditions – empowering mortgage, valuation, and appraisal firms with relevant and actionable property intelligence. Its proprietary artificial intelligence technology transforms property imagery into actionable insights, helping clients unlock new value from visual data and providing deep insight into each of the 1 million property photos uploaded daily.

Media contacts:
Restb.ai
Maya Makarem | maya@restb.ai
or
Kevin Hawkins | WAV Group
206-866-1220
kevin@wavgroup.com

Photos accompanying this announcement are available at:

https://www.globenewswire.com/NewsRoom/AttachmentNg/06854f8f-7e94-4319-84a9-9f75e4140b23

https://www.globenewswire.com/NewsRoom/AttachmentNg/0eb40f78-8077-41c3-af8a-7eca62a476b7

https://www.globenewswire.com/NewsRoom/AttachmentNg/8aee103a-cb72-47f4-9848-12af60ac4113

Tony Pistilli

Tony Pistilli, President, Valuation, Restb.ai

Nathan Brannen

Nathan Brannen, Chief Product Officer, Restb.ai

AI Uncovers $27B Risk in Appraisals

A new Restb.ai White Paper used AI to reveal major issues with how condition and quality are adjusted in property valuations. A free copy is available at bit.ly/CQwhitepaper