ew federal guidelines will significantly curb the use of automated valuation models in the appraisalprocess, says a default management and valuation firm, but they could also lead to more use of "hybrid"models.Earlier this month the five federal banking regulators that make up the
inancial InstitutionsExamination Council
Office of the Comptroller of the Currency
ederal Reserve Board
ederal Deposit Insurance Corp.
National Credit Union Administration
Office of ThriftSupervision
issued guidelines that forbid regulated institutions from relying solely on technological tools like AVMs for a real estatevaluation.The agencies define AVMs as "computer programs that estimate a property's market value based onmarket, economic, and demographic factors."According to the guidelines, "the results of an AVM would need to address a property's actual physicalcondition, and therefore, could not be based on an unsupported assumption, such as a property is in'average' condition."
, president of
Integrated Asset Services LLC
in Denver, said that given these requirements,lenders may consider "hybrid" models that incorporate both a licensed appraiser and an AVM for certainapplications.AVMs have been a point of contention in the mortgage industry. Technology providers have promotedtheir use as a way to get more accurate valuations in less time.But some appraisers say they are an inefficient substitute for trained, localized professionals.
Sunny in San Diego
The forecast for San Diego is good.Over the next 12 months the city's home values are expected to have the biggest increase in thecountry, 3.5%, according to areal estate market forecast from
Veros Real Estate Solutions
released Wednesday.The four other markets expected to record the biggest increases are the Kennewick/Richland/Pasco areain Washington State (3.4%); Pittsburgh, Pa. (2.7%); Fargo,
.D. (2.6%); and the Washington, D.C.,metropolitan area (2.5%), Veros said.About 40% of all major metro markets are expected to appreciate, though mildly, over the next year,said Veros, a Santa Ana, Calif., risk management and valuation services provider.