Washington, D.C. – Six major federal regulatory agencies have issued a call for public input on proposed regulations aimed at bolstering the credibility and integrity of automated valuation models (AVMs) used in real estate transactions. The proposed rule would impose stringent quality control standards on AVMs utilized by mortgage originators and secondary market issuers to value real estate collateral securing mortgage loans.
The agencies, including the Federal Reserve System, Consumer Financial Protection Bureau, and the FDIC, are seeking feedback on measures that would require institutions engaging in covered transactions to adopt robust policies and procedures. These standards are designed to ensure AVM valuations meet high confidence levels, mitigate data manipulation risks, address potential conflicts of interest, and promote compliance with anti-discrimination laws.
AVMs have become a key component of the real estate valuation process, propelled by advancements in database technology and larger property datasets. While these developments can lower costs and expedite loan processing, it is crucial for institutions using AVMs to establish measures ensuring their credibility and integrity. The proposed standards aim to ensure that AVMs used adhere to quality control benchmarks designed to comply with nondiscrimination laws.
Comments on the proposed rule are due within 60 days of its publication in the Federal Register, a move expected to spark widespread debate and input from various stakeholders across the real estate and financial sectors.
The agencies emphasize that robust AVM oversight is essential to maintain public trust in the mortgage industry. Ensuring accurate and fair valuations is key to protecting consumers and preventing fraud within the mortgage market.
For more information or to submit comments, please contact:
- FDIC: Julianne Fisher Breitbeil (202) 340-2043
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Key Facts
- Agency: FDIC
- Category: Fraud & Financial Crimes|Public Corruption
- Source: Official Source â†â€â€ÂÂ
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