EPD Alert Spots Risk
Responding to widespread mortgage industry demand for ways to curtail early defaults, BasePoint Analytics has just released BasePoint EPD alert, an early payment default statistical pattern recognition product designed to assess the risk of early payment default in mortgage applications and loans.
EPD alert's patent-pending analytic scoring technology enables mortgage lenders and investment banks "to score and identify each loan's early payment default risk in real time during the underwriting process," the company said.
The product identifies historical patterns in both performing and nonperforming mortgage loans in order to define which defaults are likely to result in actual financial loss to the lender or investor.
"BasePoint EPD identifies a very targeted sampling of loans likely to have a first, second or third payment default which doesn't cure," said Tim Grace, president and CEO of BasePoint Analytics.
"That means it's not just finding loans that have missed the first payment because somebody didn't get their coupon book. BasePoint EPD finds loans that are causing losses in the mortgage industry."
And while that makes it a good tool for servicers to use in starting foreclosure proceedings in a timely way, "We would rather that lenders use the tool to score loans prior to funding," he told NMN.
"In our early tests, BasePoint EPD alert performed two and a half times better than credit scores alone in identifying EPD losses." When lenders score all new applications and select the highest scoring 10% to 15% of applications for further review, he said they are able to weed out the majority of loans likely to default early. (c) 2007 Mortgage Servicing News and SourceMedia, Inc. All Rights Reserved. http://www.mortgageservicingnews.com/ http://www.sourcemedia.com/