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Hometrack AVM for edeus

Edeus has confirmed Hometrack will be supplying its automated valuation model for its point-of-sale offer proposition when it launches in September.

Although the new lender intends to do most of its business through a POS-O system, Alan Cleary, managing director of edeus, says the waters are untested, so it only expects to do a small percentage of business in this way at first.

He says: “We have low expectations of how much business will be done using POS-O on day one and so the majority will be done using the standard process. Our proposition will build over time and our long-term strategy is to do most of our business using this technology.”

However, because not all customers and brokers will want to pay extra for a POS-O using an AVM, edeus’ proposition will offer them a choice by making standard valuation processes available.

Cleary adds: “It’s all about choice. There will be a cost for a POS-O, although this will be finalised nearer our launch date, so if you want an instant decision you will have to pay for it.”

In the early days of its launch edeus will initially impose an LTV and maximum property value limit on POS-O cases. The latter is set at 500,000, but different products will be categorised with different LTVs. Buy-to-let products will be exempt from a POS-O initially, unless they have an LTV of under 60%.

Credit scoring will also feature prominently in the lender’s POS-O proposition. Although an AVM checks the market value of a property, Cleary says credit scores remain the most important thing when it comes to lending money.

He adds: “Lenders can’t rely on reselling a property if the borrower goes into arrears to get their money back. Customers must have the ability and willingness to repay, and there is no reason in this day and age of sophisticated credit scoring why properties are repossessed.”

GE Money Home Lending launches its AVM pilot this week, also via Hometrack. But the AVM will only be for remortgages up to 70% LTV and will not be used at point-of-sale.

Duncan Berry, managing director of GE, says: “We are interested in using technology to make the mortgage process simpler for our intermediaries.”

Key Retirement Solutions has joined the Association of Mortgage Inter- mediaries just one month before its equity release working party is due to vote on becoming a permanent fixture within the trade body.

Working parties within AMI have finite lives, but the next AMI working group meeting will be to discuss the creation of a separate equity release body under the AMI umbrella.

Although it is not yet clear what structure the working group will take if the vote is positive, Rob Griffiths, associate director at AMI, says it may be given its own name while operating with the clout of AMI behind it.

Colin Taylor, managing director of KRS, says one of the reasons it didn’t join AMI sooner was because it wasn’t sure if it would be a good enough voice for the equity release industry.

However, following the establishment of AMI’s equity release working party and press reports that this could be made a permanent fixture, it has decided to support AMI in encompassing the equity release community.

He adds: “We have seen AMI’s commitment to the equity release market over the last year. With the number of advisers we have it’s a sizable financial commitment for us, which is a sign of the importance KRS places on this new division within AMI. We think it’s high time equity release advisers got their own dedicated voice.”

Griffiths adds: “We’re delighted to welcome KRS as a new member of AMI. We are a strong supporter of the equity release market.”

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