I still do not fully understand the benefits of the LAToken business model as compared to the traditional model.
May be in this form will be clearer for you.

1. Homeowner borrows cash against property -- Nope, they SELL part of their property.
2. Local vendor provides appraisal -- Independent appraisals are used as a benchmark to ensure that the prices are fair. However prices of tokens and property sale are determined by market auctions at the settlement date.
3. Local custodian holds property -- Custodian can be international, there will be many certified custodians.
4. Homeowner auctions tokens representing property on LAT platform -- Initially tokens backed by property are sold by a custody, which uses cash from token sale to buy a part of property.
5. Homeowner can repurchase property from current token owner at newly appraised price (centralized, may be lowered) -- Custody sells the property at an auction which together with independent appraisal insures that the price is fair. Insurances will be used.