Press release

EMF and EAA Map Features and Application of Automated Valuation Models

9 May 2016

The European Mortgage Federation (EMF) is pleased to announce the publication of a joint paper together with the European AVM Alliance (EAA) examining the features and key applications of Automated Valuation Models (AVMs) and of the state of the Industry across Europe.

AVMs are statistical valuation solutions providing an estimate of value of any specified property at a specified date, using sophisticated modelling techniques in an automated manner and typically including a comparables-based approach similar to surveyor valuations.

As AVMs have been established in more and more jurisdictions in recent years and have been the subject of increasing attention, the European Mortgage Federation (EMF) and the European AVM Alliance (EAA) have for the first time joined forces to map the use and functions of these and other statistical valuation techniques in the different Member States.

The findings of this joint EMF and EAA paper indicate that AVMs are:

– primarily used across many jurisdictions for the purpose of portfolio valuations alongside other valuation techniques; and that

-AVMs are also used to determine property values for a variety of other purposes depending on the jurisdiction, such as mortgage origination, re-mortgaging and quality control.

In addition, the paper discusses the shift in the use of AVMs since 2008 as well as the existing rules, guidance and standards on AVM use in the different countries.

In commenting on the joint paper, Luca Bertalot, EMF-ECBC Secretary General, stated:

“In light of the increasing establishment of AVMs in Europe in recent years, it is vital, as an industry, to have a thorough understanding of their application across jurisdictions. The accurate and reliable valuation of property is one of the fundamental cornerstones of the mortgage lending and covered bond businesses.”