New rules from the five federal bank regulatory agencies no longer accept technological tools like automated valuation models alone as a substitute for an appraisal, forcing vendors to upgrade these products with the required on-the-ground inspection and other data.
Automated valuation models provide property values using mathematical modeling and a database of comparable properties. The Financial Institutions Examination Council, which is made up of the Office of the Comptroller of the Currency, the Federal Reserve Board, the Federal Deposit Insurance Corp., the National Credit Union Administration and the Office of Thrift Supervision, released new guidelines on Dec. 2 that are impacting lenders that rely on AVMs.
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