“The proposed guidance shows how ROVs intersect with appraisal independence requirements and compliance with applicable laws and regulations,” the news release read. “The proposed guidance describes how financial institutions may create or enhance their existing ROV processes while remaining consistent with safety and soundness standards, complying with applicable laws and regulations, preserving appraiser independence, and remaining responsive to consumers.”
The agencies said the proposed guidance highlights the risks associated with inaccurate property valuations and provides examples of ROV policies and procedures that financial institutions can adopt to identify and address potential valuation discrimination risks. The public has a 60-day period to submit comments on the proposed guidance.
This initiative comes days after the agencies announced a proposed rule to implement quality control standards for AVMs to address racial bias in home appraisals. The FHFA said the proposed measures 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 non-discrimination laws.”
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