Significant Differences in Values Determined by Traditional Home Appraisals and AVMs Could Impact LTV Ratios
If lenders shift from traditional appraisals to automated valuation models, there could be an im-pact on loan-to-value ratios and loan balances for new originations, according to CoreLogic. The firm found that traditional appraisals done when a mortgage is originated are less likely than AVMs to reach a value below the contract price.