LoanSafe RDS™

Benefits

LoanSafe Risk Decision System (RDS) is the latest and most advanced automated mortgage risk management tool.  LoanSafe RDS enables residential mortgage originators and investors to efficiently assess the value risk and fraud potential in a loan transaction. LoanSafe RDS performs an integrated analysis of the agent, collateral, borrower, and credit characteristics to calculate a risk score and identify loan characteristics of greatest concern.

Loan performance and real estate fraud are the mortgage industry’s most significant threats to profitability. A full view of risk requires lenders and secondary market investors to carefully evaluate all loan characteristics for potential performance issues, including loss due to fraud.  Utilizing groundbreaking econometric models drawn from a 40-million loan database, LoanSafe RDS presents a comprehensive risk view in a single-step analysis that evaluates the agent, property, borrower, and borrower credit characteristics. The result is a highly accurate loan risk picture.

Leading Mortgage Risk Management Innovation

 
Historically, mortgage loan risk analysis relied primarily on credit characteristics and CLTVs assumed to be accurate, providing no insight into fraud or third-party agent risk. In 2002, we introduced an efficient collateral-risk scoring tool to predict early payment default (EPD) and loss severity.  Then in 2005, LoanSafe® was introduced, improving EPD detection rates by more than 200 percent by combining collateral-risk modeling improvements with borrower and broker characteristics.  Now LoanSafe RDS takes loan performance and loss severity predictions to the next level by incorporating credit characteristics into its scoring model.

By applying an advanced set of integrated models, LoanSafe RDS simultaneously examines a subject property and market, borrower financial and behavioral patterns, and agent quality and risk.  The combined results of the data-rich process make LoanSafe RDS the market’s most innovative and effective loan-risk management tool.

Powering Your Workflow

LoanSafe RDS provides a fast, accurate loan-risk detection rate that quickly and precisely pinpoints loan risk factors most predictive of fraud, early payment default, and loss severity. By identifying loans with risk elements, LoanSafe RDS streamlines low-risk loan approvals, which typically account for up to 70 percent of all loans processed through the system.  Lenders and investors alike can proceed with greater confidence, expediting workflow and increasing production volumes.

Key Benefits

• Quantifies loss and performance risk more accurately than credit or collateral assessments alone
• Effectively stratifies loan risk, reducing overall loan default exposure
• Accelerates workflow and boosts production capacity without adding staff

Agent: LoanSafe RDS contains the industry’s leading solution for evaluating and grading brokers and agents. Lenders and investors can now promptly evaluate any third party based on the quality of loans submitted to the business. Drawing from a nationwide database of more than 200,000 brokers (100,000+ active within the last year) and more than 40 million loans, LoanSafe RDS safeguards against adverse selection. LoanSafe RDS’s comprehensive reports also contrast agent quality for the enterprise against industry and market-area quality.

Collateral: LoanSafe RDS’s groundbreaking metrics identify possible property-value inaccuracies or misrepresentations. This proprietary risk-management engine evaluates numerous elements to determine a score, including multiple relationships and comparisons between property characteristics, pricing and appraisal attributes, and geographic conditions. In addition, LoanSafe RDS references foreclosure and volatility models as well as other performance studies to incorporate the most accurate data possible—all while minimizing low false-positive rates.

Borrower: LoanSafe RDS represents a revolutionary advance from more traditional compliance-oriented tools currently available. LoanSafe RDS excels at recognizing fraudulent behavior patterns by aggregating then assessing a borrower’s information history, determining unusual patterns that are highly correlated with potential fraud.

Credit Characteristics: LoanSafe RDS integrates a borrower’s credit characteristics to deliver a true total view of loan risk, delivering a more accurate assessment of performance and loss risk, while mitigating false positives. LoanSafe RDS  incorporates client-specific decision tree analytics for fraud identification and business controls, enabling a flexible risk solution.

Additional Benefits:

• Increase loan performance and reduced loss severity, leading to lower loan losses and loss reserve requirements
• Streamline loan processing, leading to increased numbers of loans processed
• Reduce or avoid loan origination costs
• Decrease investor kick-outs, leading to higher loan pool quality
• Decrease turnaround time for loan pool evaluation