FNC Inc., Oxford, Miss., said it has received a patent for its appraisal score, a move that makes the product the first patented appraisal tool.
The score is used to identify compliance risk and fraud issues in residential property appraisals so that problems can be addressed prior to funding or purchasing a loan.
The company said the patent had been pending since it began to sell the score five years ago. The waiting time for such patents can be long because the process is document intensive, the firm said.
The business-method patent covers an algorithm that generates a score. FNC said the score is based on a set of “generally accepted appraisal rules,” a term it has a registered trademark on.
In an interview earlier this year, Robert Dorsey, FNC’s chief analytics officers and co-founder, said these are rules the company automated several years ago that have grown over the years to a set of more than 1,500.
The automated rules detect compliance and risk errors that violate federal regulations related to professional appraisal practices. As violations detected rise, the score drops.