Freddie Mac AVM to Assist with Appraisal Reviews
March 11, 2010
Freddie Mac recently announced that starting February 28, 2010, Home Value Explorer (HVE) will assist lenders in reviewing appraisals. Loan Prospector will provide a point value estimate for the property address from HVE, which is Freddie's automated valuation model (AVM). The use of HVE, along with appraisal best practices, can be found in Seller/Servicer Guide Bulletin 2009-18. Loan Prospector will return the HVE point value estimate that can then be used to determine whether an appraisal requires additional review.
Freddie Mac recommends that if the variance between an appraisal and the HVE point value estimate is more than 20 percent then: 1) the appraisal should be considered for additional review by a senior underwriter or in-house appraiser; 2) obtain a review appraisal or a second appraisal; or 3) reject the appraisal.
Freddie adds that the HVE point value estimate from Loan Prospector should not be shared with the appraiser of the subject property; and all HVE data should be treated as strictly confidential and appraiser independence should be maintained.