Quality Control Standards for Automated Valuation Models
Quality Control Standards for Automated Valuation Models
FOR FURTHER INFORMATION CONTACT: Julie Giesbrecht, Senior Policy Analyst, Office of Housing and Regulatory Policy, (202) 557-9866, Julie.Giesbrecht@fhfa.gov; or Karen Heidel, Assistant General Counsel, Office of General Counsel, (202) 738-7753, Karen.Heidel@fhfa.gov. For TTY/TRS users with hearing and speech disabilities, dial 711 and ask to be connected to any of the contact numbers above.
SUMMARY: The OCC, Board, FDIC, NCUA, CFPB, and FHFA (collectively, the agencies) are adopting a final rule to implement the quality control standards mandated by the Dodd-Frank Wall Street Reform and Consumer Protection Act (Dodd-Frank Act) for the use of automated valuation models (AVMs) by mortgage originators and secondary market issuers in determining the collateral worth of a mortgage secured by a consumer’s principal dwelling. Under the final rule, institutions that engage in certain credit decisions or securitization determinations must adopt policies, practices, procedures, and control systems to ensure that AVMs used in these transactions to determine the value of mortgage collateral adhere to quality control standards designed to ensure a high level of confidence in the estimates produced by AVMs; protect against the manipulation of data; seek to avoid conflicts of interest; require random sample testing and reviews; and comply with applicable nondiscrimination laws.