New MISMO Standard for Automated Valuation Models

The Mortgage Industry Standards Maintenance Organization (MISMO) recently introduced a new standard to help the real estate finance industry better assess the reliability of automated valuation models (AVMs).

The new Automated Valuation Model (AVM) Common Confidence Score Standard and Guidance creates a uniform way for lenders and industry participants to evaluate the risk associated with AVMs. This initiative is designed to increase trust in AVMs, improve operational efficiency, and reduce costs across the industry.  The new standard provides a common scale to test and validate AVM scores, enabling lenders to make more informed, risk-based decisions.