Trade groups caution risks of unintended consequences from proposed AVM rules.
In the mortgage industry, the Mortgage Bankers Association (MBA) and Consumer Bankers Association (CBA) recently commented that automated valuation models (AVMs) can help alleviate some of the shortages of appraisers, reduce costs and eliminate potential biases within the appraisals. However, both groups made it clear that any use of AVMs would require robust regulation to ensure proper checks and balances.
AVMs are being looked at as a potential solution to some of the concerning issues currently facing the mortgage industry. AVMs are computer-generated estimates of the value of a property, usually based on publically available information such as recent sales of comparable homes in the area. Potential benefits of using AVMs include:
• Alleviating appraiser shortages: AVMs could help ease some of the tension on the current system caused by appraiser shortages.
• Reduced costs: Fewer manual appraisals could result in a cost reduction for mortgage lenders and consumers.
• Safeguarding against bias: Automation would make it more difficult for human errors and biases to creep into the appraisal process.
The MBA and CBA determined that, while AVMs could bring many benefits, appropriate checks and balances were necessary for proper regulation. Working together, the two groups hope to ensure that the use of AVMs does not undermine the quality of appraisals and that all regulations are thoroughly and equitably enforced.
You can read this full article at: https://www.housingwire.com/articles/trade-groups-warn-of-unintended-consequences-from-proposed-avm-rules/(subscription required)
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