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Federal regulators requested public comment on a proposed rule designed to implement quality control standards for automated valuation models, or AVMs, used by mortgage originators and secondary market issuers in valuing real estate collateral securing mortgage loans.
Details: Under the proposed rule, the agencies would require institutions that engage in covered transactions to adopt systems to ensure AVMs adhere to quality control standards designed to ensure the credibility and integrity of valuations.
Background: AVMs are used as part of the real estate valuation process and are driven in part by advances in database and modeling technology and the availability of larger property datasets.
ICBA View: In a comment letter to the Consumer Financial Protection Bureau last year, ICBA said regulators should avoid burdensome rules on AVMs, particularly for the community banks using these models to make underwriting decisions and find comparable values in rural areas.
Deadline: Comments are due within 60 days of the proposed rule's publication in the Federal Register. ICBA plans to submit comments.