HSBC is now able to view the amount of equity any customer has in their home, thanks to a product developed by Hometrack and Callcredit.
The Equity Indicator product has been two years in the making and combines Hometrack’s automated property valuation information with Callcredit’s credit referencing data.
Hometrack says it is the first time a lender has been able to get such an accurate picture of borrowers’ financial status.
It is designed to assess an individual’s overall equity status and allows for both secured and unsecured borrowing.
The product fits in with guidance published by the Office of Fair Trading last month which stated that “lenders should make a reasonable assessment of whether a borrower can afford to repay their loans.”
David Catt, chief operating officer at Hometrack, says: “Equity Indicator will provide HSBC with the ability to determine an individual’s credit worthiness and their total equity position.
“It has been designed to play an instrumental role in customer and risk management processes as well as significantly aiding arrears handling.”
Graham Lund, managing director at Callcredit, says: “Equity Indicator is a powerful tool that will give our clients further help in managing their businesses at this challenging time.
“The quality of the product is also evidence of what can be achieved when companies with different but complementary specialisms work together.”
Mark Thundercliffe, head of retail credit risk at HSBC, says: “We have enjoyed working closely with Callcredit and Hometrack on this development and look forward to taking full advantage of the significant risk management benefits this will deliver across the business.
“Equity Indicator enables HSBC to make better informed and more robust lending decisions.
“We believe this to be the next generation of credit profiling.”