AVM REVIEW AND TESTING

The Interagency Appraisal and Evaluation Guidelines released in December, 2010 clearly state that an institution should establish standards and procedures for independent and ongoing monitoring and model validation, including the testing of multiple AVMs, to ensure that results are credible.

The validation can be performed internally or with the assistance of a third party, as long as the validation is conducted by qualified individuals that are independent of the model development or sales functions. An institution should not rely solely on validation representations provided by an AVM vendor. An institution should perform appropriate model validation regardless of
whether it relies on AVMs that are supported by value insurance or guarantees.

An institution should ensure that persons who validate an AVM on an ongoing basis are independent of the loan production and collection
processes and have the requisite expertise and training.

Contact us today to learn more about how we can assist you in meeting current regulatory guidelines.