Lender, GMAC RFC, is to pilot point-of-sale decisioning software enabling intermediaries to get an instant decision on mortgage applications.
Starting next month with six brokers, GMAC RFC expects the software to reduce the time taken to get a decision.
Stephen Knight, executive chairman of GMAC RFC, said the software would rely on credit scoring and checking and give a yes, no, or needs to be referred decision on applications.
Once the decision had been given, Knight said GMAC RFC would honour it without further paperwork.
Following the initial pilots, Knight said the software would be tried with a further six brokers before being rolled out next year.
While he accepted computer-based underwriting might lead to a certain amount of credit losses, he said the compensating volume increase Knight expected would more than cover these.
On top of this, he said GMAC RFC was looking to include point-of-sale valuation also, although he did not expect that to be available to the market until 2005.
Differentiating the initiative from decision in principle services (DIP), Knight said: ‘All other lenders use point-of-sale systems to produce DIPs. This means the lender is not committed and can choose to take references, seek further information, or reject the case at its discretion. A DIP is simply an indication that the application looks okay and does not save time for introducers.’
Knight concluded: ‘GMAC RFC is pilot testing a point-of-sale system with a small group of introducers next month that will make a decision which commits us. Clearly it is subject to the information shown on the application form agreeing with what has been keyed. No further references or pieces of paper will be requested or demanded.’
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