Quality Control Standards for Automated Valuation Models



Quality Control Standards for Automated Valuation Models

Subject: Residential mortgage valuation
Agency: CFPB, Federal Reserve, FDIC, FHFA, NCUA, OCC
Proposed rule

The Office of the Comptroller of the Currency (OCC), Federal Reserve Board, Federal Deposit Insurance Corp. (FDIC), National Credit Union Administration (NCUA), Consumer Financial Protection Bureau (CFPB), and Federal Housing Finance Agency (FHFA) (collectively, the agencies) invite comment on a proposed 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 proposal, the agencies would require institutions that engage in certain credit decisions or securitization determinations to 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.

FR Doc: 2023-12187
Date proposed: June 2, 2023
Comments due date: Aug. 21, 2023
Effective date:

Rule compliance date:
Agency release:
Related Reg Report item(s):

Increasing use of automated value models (AVMs) for real estate key in agencies’ proposed rule on their use