From Jeff Knight
In September, GMAC-RFC became the first lender to provide point-of-sale offers. Included within this technology is the use of automated valuation models. Although they have been around for a couple of years, AVMs have recently had a large slice of publicity and some people have been expressing concerns about them.
Unfortunately, not everyone has imagination and vision and some feel threatened by anything new, so I can understand from where the concerns emanate. I would like to provide some comfort, particularly in response to Danny Lovey’s letter in last week’s Mortgage Strategy.
There are many rules and limits involved when using AVMs. If an AVM-produced valuation undercuts a manual valuation the latter will be defaulted to. These rules mean AVMs do not work on every property. At the moment they work on about 60% of our business but this will grow in time.
The target for the number of manual valuations carried out in one day is about six for the largest valuers so these are not the panacea that Lovey might think they are. Moreover, the comprehensive work we have undertaken, endorsed by two surveys carried out by rating agencies, confirms that there will be no material deterioration in the security of a mortgage pool in which valuations have been carried out by the use of an AVM rather than manually.
Irrespective of whether a lender is obtaining for its sole purposes a manual valuation and cursory note of property condition, it has always been the case that clients should be encouraged to obtain a full home buyer’s report which is a survey commissioned by and for them that gives a comprehensive view of a property’s condition.
If a client applies for a mortgage, how can it be in their interests to give them a full mortgage offer in 10 to 30 days when they could get to the same position in 10 to 30 minutes?
POS-O takes millions of pounds out of the mortgage application process and puts that money back where it belongs – in client empowerment, improved products and better service.
Across the economy people are demanding service right here, right now. Anybody who resists this will be competing against those who embrace it. They run the risk of looking like the lone commuter struggling with a mobile CD player and case full of discs in a train carriage largely occupied by people using iPods the size of credit cards – in other words, a bit cumbersome, and a lot out of date.
Director of marketing