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LoanPerformance Sees Synergies with First American

When LoanPerformance held a recent "risk summit" here, CEO Dan Feshbach highlighted some of the reasons the company recently agreed to be acquired by First American Real Estate Solutions.

Mr. Feshbach told attendees that LoanPerformance has long sought to partner its mortgage database with a provider of property information.

And he said the enhancements and new analytics created by the partnership with FARES allow LoanPerformance to expand its services beyond the loan servicer and investor bases that the company currently serves.

"We don't do much business in the origination side of the house," he noted.

LoanPerformance's database will not be merged with First American's, but the companies will capitalize on the affiliation to improve the predictive power of current analytics and create new analytic tools, Mr. Feshbach said.

Both companies say the new affiliation will give LoanPerformance customers access to the substantial data, technology and capital resources of First American Real Estate Solutions.

Mr. Feshbach said he will remain at the head of LoanPerformance for at least four years under the deal.

Among the benefits, he said LoanPerformance expects to use data from FARES to enhance its RiskModel by incorporating information about the presence of a second lien and by including ZIP code and additional housing price indices in the model. The improvements will enhance loan-to-value information.

LoanPerformance also expects to create richer analytics and business information by including First American's mortgage, property and credit information as well as real estate analytics to create new products.

Those products include PreTell, a borrower-specific prepayment score. LoanPerformance also plans to track "hidden seconds" and cumulative LTV data.

Mr. Feshbach said tracking second liens that are added simultaneously or after loan origination will be of particular value because these "hidden seconds" are a predictive variable in assessing default probability.

"That's a risk anyone who has invested in these securities is not aware of today."

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