Finance
A Washington lender uses an automated valuation model (AVM) instead of a traditional appraisal for a home equity loan. AVMs are:
AProhibited for all loan types by federal law
BPermitted for some loan types but not for high-risk transactions requiring full appraisals✓ Correct
CRequired for all mortgage loans over $250,000
DOnly used for commercial properties
Explanation
Automated Valuation Models (AVMs) may be used for certain loan types and risk levels, but federally regulated lenders are required to use USPAP-compliant appraisals for transactions above certain thresholds and for higher-risk loans.
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