Article: Metrics Matter: Without Forecast Standard Deviation or a confidence score based on FSD, lenders are forced to guess at AVM risk management.

Lenders are greatly increasing their use of automated valuation models to confirm property value and to streamline the lending process, by using the AVM as a property value screen in home-equity lending. As the market has grown, so has the number of commercially available AVMs. Each AVM has different performance characteristics, geographic coverage and confidence scores. For the most powerful risk management, lenders must understand the statistical performance characteristics of the AVM they use. That also means understanding Forecast Standard Deviation. The benefit of FSD is that it statistically links the confidence scores of an AVM to the AVM's forecasts of property ...

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