Comment Period on Quality Control Standards for AVMs Proposed Rule Closes August 21

Stakeholders have until August 21 to submit comments on a proposed rule designed to ensure the credibility and integrity of models used in real estate valuations. In particular, the proposed rule would implement quality control standards for automated valuation models (AVMs) used by mortgage originators and secondary market issuers in valuing real estate collateral securing mortgage loans.

Six federal regulatory agencies requested public comment on June 1. For more information or to submit a comment, please visit Regulations.gov.

Under the proposed rule, the agencies would require institutions that engage in covered transactions to adopt policies, practices, procedures, and control systems to ensure that AVMs adhere to quality control standards designed to ensure the credibility and integrity of valuations. The proposed standards are designed to ensure a high level of confidence in the estimates produced by AVMs; help protect against the manipulation of data; seek to avoid conflicts of interest; require random sample testing and reviews; and promote compliance with applicable nondiscrimination laws.

The proposed rule was published in the Federal Register on June 21, 2023, and has a 60-day comment period, ending August 21, 2023.