AVM Testing and Evaluation Using AVM Performance Metrics

In particular, the Consumer Finance Protection Board (CFPB) develops minimum standards for appraisal management companies (together with the Board of Governors of the Federal Reserve System, the OCC, the FDIC, the National Credit Union Administration (NCUA), and the Federal Housing Finance Agency (FHFA)) in support of the Dodd-Frank Wall Street Reform and Consumer Protection Act to the Financial Institutions Reform, Recovery, and Enforcement Act (FIRREA). [...]Government Sponsored Enterprises (GSEs), such as the Federal Home loan Mortgage Corporation (Freddie Mac) and the Federal National Mortgage Association (Fannie Mae) have been given the mandate by the FHFA to update the lending process, including the modernization of the appraisal process (US Department of the Treasury, 2018, pp. 103-106). [...]the first objective of this study is to detail the currently-used, industry testing of AVM valuations, by independent third-parties, to corroborate vendor-reported FSDs. [...]the second objective of this study is to introduce statistical tools to compare, rank and grade the performance of multiple competing AVMs, via AVM Performance Metrics. [...]parties (apart from AVM providers and clients), such as AVMetrics, regularly perform independent AVM testing to evaluate the accuracy of the AVM's valuations, against known selling prices, for hundreds of thousands of target properties in multiple markets.