Santa Ana, Calif.-based Veros Real Estate Solutions, a provider of collateral risk analytics and decision systems, has updated its automated valuation model (AVM) testing policies for its VeroVALUE AVM product. The company says its testing policies are designed to ensure open communication and the transfer of transparent and accurate information between all parties.
Veros asserts the understanding and proper prioritization of critical test data, such as the definition and calculation of accuracy, confidence score correlation to accuracy, ranking functions, gross hit rates and effective hit rates. Along with appropriate confidence score thresholds and other performance measures, this information is considered essential to making decisions related to the appropriate use of AVMs as a standalone solution or within an AVM cascade.
"The validation landscape for AVMs has changed significantly over recent history," notes Darius Bozorgi, CEO of Veros. "Today, numerous parties may be involved in any given validation of automated risk tools. These stakeholders have always included the end-user lender or investor and the AVM developer, but now increasingly involve third-party participants such as testing consultants, resellers, distributors and cascade providers."