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#1519572 - 03/09/11 07:46 PM AVM Validation Procedures
Many Hats Offline
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Orlando, FL
Does anyone have procedures they can share for AVM model validation/testing?

Per the IA appraisal and evaluation guidelines, I know we need to do it, but I really don't have time to create something from scratch? :0)

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#1520690 - 03/11/11 04:38 PM Re: AVM Validation Procedures Many Hats
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Bump

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#1522416 - 03/16/11 03:02 PM Re: AVM Validation Procedures Many Hats
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Anybody? smile

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#1522503 - 03/16/11 04:32 PM Re: AVM Validation Procedures Many Hats
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What I am referring to is the statement in the IA Guidelines about bank's needing to perform AVM validations....

From Page 53 - "An institution should establish standards and procedures for independent and ongoing monitoring and model validation, including the testing of multiple AVMs, to ensure that results are credible."

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#1522679 - 03/16/11 07:31 PM Re: AVM Validation Procedures Many Hats
rlcarey Offline
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I can't think of too many smaller banks that will have the resources to pull this off.
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#1529821 - 03/31/11 07:00 PM Re: AVM Validation Procedures Many Hats
Kathleen O. Blanchard Offline

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This reminds me of small banks trying to validate interest rate risk and ALLL models.

You could, perhaps:

  • order a full appraisal on a sample of properties that had an AVM and compare values
  • run a sample of properties through multiple AVM models
  • hire a third party to validate in some fashion most likely now available or to be available shortly


Validation must be done well.
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Kathleen O. Blanchard, CRCM "Kaybee"
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#1529921 - 03/31/11 08:18 PM Re: AVM Validation Procedures Kathleen O. Blanchard
Sheldon Hendrix Offline
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I know this is a dumb question, but I'm asking anyways.

If we use an online resources commonly used in addition to other methods to reconcile market value (e.g., www.zillow.com), we are expected to validate their results because they are a using an AVM, correct?

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#1529938 - 03/31/11 08:32 PM Re: AVM Validation Procedures Sheldon Hendrix
Kathleen O. Blanchard Offline

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I don't know (IMO) that you have to validate all the way back in a chain of systems, but you have to at the end of the day demonstrate that you can depend upon the systems you are using.
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Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#1530050 - 04/01/11 12:34 AM Re: AVM Validation Procedures Kathleen O. Blanchard
rlcarey Offline
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IMHO - based on my experience any values associate with Zillow are totally unreliable. They have a house in the back of our place valued at $150K and it is nothing but a shell.

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#1530064 - 04/01/11 01:34 AM Re: AVM Validation Procedures rlcarey
Kathleen O. Blanchard Offline

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If Zillow is what you are hanging your hat on, then yes. But if it is just one cross check in a process that uses multiple values, it is less important, which is how I read his statement:

Quote:
If we use an online resources commonly used in addition to other methods to reconcile market value (e.g., www.zillow.com), we are expected to validate their results because they are a using an AVM, correct?
_________________________
Kathleen O. Blanchard, CRCM "Kaybee"
HMDA/CRA Training/Consulting/Mapping
The HMDA Academy
www.kaybeescomplianceinsights.com

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#1538836 - 04/21/11 04:58 PM Re: AVM Validation Procedures Kathleen O. Blanchard
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Has anyone had an audit or exam where this came up? We are having a compliance exam in June and I'd be curious to know if anyone else has had to come up with something.

We have a number of appraisals and pulled multiple AVM's on each, so I have some samples to start with, but no real guidance on what I am supposed to be comparing - specifically - that will make examiners happy.

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#1663785 - 02/10/12 09:42 PM Re: AVM Validation Procedures Many Hats
Live 2 Comply Offline
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We've been checking into using AVMs and I was wondering how most are addressing the 2010 guidelines? And if completing an audit on AVMs to ensure validity, what sort time schedule are most doing? 12 months?

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