BasePoint Analytics introduces predictive technology for mortgage fraud

Source: BasePoint Analytics

BasePoint Analytics, a leading provider of fraud analytics and fraud consulting services to the financial services market, today announced the general release of FraudMark, a revolutionary new fraud detection product for mortgage lenders, investments banks and due diligence firms.

Today, most fraud products in the mortgage industry are based on comparisons between application information and third-party data sources. However, the overall rise in identity theft and increased rate of compromises for data aggregators has permitted fraudsters to use this information as they commit mortgage fraud. The results are mortgage loan applications that match up very well with the trusted data sources, but are in fact fraudulent.

BasePoint's FraudMark uses patent-pending technology that combines two highly effective approaches for finding fraud: the model is based on behavioral trends for applicants, brokers and appraisers as well as historical patterns of both fraudulent and non-fraudulent loan applications. By combining both techniques, FraudMark provides a much higher degree of predictiveness to precisely identify which applications have the greatest risk of fraud. This significantly reduces the overhead cost of retrieving expensive data to match against loan applications. In addition, FraudMark includes model performance reports that indicate performance metrics including how many fraud applications will be detected at each score level, the false positive at each score level, as well as the number of applications anticipated to score within each score level. This gives a lender the ability to set and change staffing, real-time decision criteria, and risk tolerance levels based on their individual risk management and production goals.

"The credit card industry has driven down fraud losses by 70% through the use of pattern recognition technologies," explained Tim Grace, President of BasePoint Analytics. "The analytic advancements of FraudMark now enable the mortgage industry to go beyond this and provide mortgage lenders the ability to cost effectively score all of their loan applications in real-time, drive down their fraud losses, and increase overall production."

BasePoint FraudMark provides a lender with the ability to score all applications at multiple times during the loan origination process as additional information is accumulated. When combined with industry best practices in loan review processes and strategies, underwriters and risk managers now have the ability to review and verify only the highest-scoring loans and allows the majority of the loans to be quickly and securely funded. With BasePoint's seamless integration into lenders' loan origination systems, fraud risk evaluation can now be integrated into real-time qualification initiatives.

"Mortgage lenders and investors are demanding a sophisticated analytics solution to address the multi-faceted onslaught from fraudsters," explained Ben Graboske, CTO of First American Real Estate Solutions. "FraudMark goes beyond traditional "red flag" tools with neural network technology that incorporates a full view of the application plus historical behavioral patterns. When integrated with lenders' systems, BasePoint's unique approach leverages additional internal data that produces extremely effective and quantifiable fraud predictiveness."

BasePoint Analytics also provides initial fraud assessments to help lenders understand historical fraud loss rates as well as current risk exposure. Fraud managers who were previously employed by companies such as Wells Fargo, Bank of America, Capital One, Providian and Visa International show lenders opportunities for loss reduction, metrics for measuring fraud initiatives and solutions, as well as best practice fraud review processes and strategies. These services help lenders understand their fraud reduction opportunities and overall return on investment. During the product implementation, these same fraud experts work on-site with lenders to help design highly efficient fraud prevention organizations and best practice loan review processes and strategies.

"This clearly sets BasePoint Analytics apart from other vendors in the space," said Shelley Cloyd, Director of Mortgage Solutions at BasePoint Analytics and previous Vice President of New Century Mortgage Corp. "BasePoint provides the operational, organizational, and technology expertise to help lenders reduce their overall risk profile and processing costs."

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