First American LoanPerformance Announces Availability of Riskmodel™ 4.0 Analytics Solution
—Latest Release Features New Graphical User Interface, Conversion Wizard, Application Programming Interface and Updated Loan Models—
October 31, 2007, SANTA ANA, Calif.
First American LoanPerformance, a member of The First American Corporation (NYSE: FAF) family of companies and a leader in residential mortgage data and analytics for the mortgage industry and Wall Street, today announced the availability of RiskModel 4.0, its industry-leading analytics solution which forecasts future mortgage prepayments, defaults, losses and projected cash flows. Highlights of the new release include:
- New Desktop Graphical User Interface (GUI): RiskModel 4.0 features a completely reengineered user experience that enables access to sophisticated analytics through an easy-to-use interface.
- New Conversion Wizard: A new conversion tool saves time and gives users the flexibility to work with a full-range of commonly used Object Linking and Embedding Database (OLEDB) compatible data files as inputs into the RiskModel.
- Updated Application Programming Interface (API): Version 2.0 of a Windows-based API enables users to automate their analytics research and reporting by integrating it directly into a company’s existing business workflow. The updated API enables customizable, fully automated bond analytics research for high-volume portfolio analysis when integrated into existing business processes.
- Updated Models: Several model enhancements have extended the scope and quality of the software analytics in RiskModel. Subprime delinquency, default and prepayment equations have been fully redeveloped to better capture the current dynamics of the mortgage market. New loss-given default models improve the accuracy of loss estimates for prime, Alt-A and subprime market segments. The addition of a new housing price index (HPI) simulation model better captures boom and bust cycles in housing price dynamics and supports improved model-estimated credit loss distributions. A new home equity line of credit (HELOC) model featuring default, delinquency, and utilization forecasting is also included in this release.
“The release of RiskModel 4.0 comes at a most critical time for our industry as the ability to adapt to latest market conditions, such as structural changes and atypical market trends, is paramount,” said Dan Feshbach, president and chief executive officer of First American LoanPerformance. “With this release, RiskModel now provides the broadest spectrum of risk scenarios including forecasts of prepayment, delinquency, default and loss probabilities and operates either as a standalone system for individual loan analysis and risk analytics or as a powerful analytic application that’s customizable to enterprise-level workflows,” added Feshbach.
LoanPerformance RiskModel is the leading commercially available forecasting solution that simultaneously considers prepayment and default risk while integrating the effects of borrower behavior, interest rate fluctuations and housing price movements. RiskModel contains multiple statistical models that can be used with prime, alt-A and nonprime loans and home equity lines of credit.
RiskModel enables institutions to more accurately set loan loss reserves and to perform a full spectrum of risk management processes including: portfolio grooming, risk-adjusted pricing, cash flow projections, valuation of securities or insurance, loss mitigation, asset and liability management, hedging and the negotiation of appropriate coverage on securitization and guaranty fees. The model's ability to perform multiple scenarios using thousands of possible future paths for interest rates and housing prices has made the RiskModel the predictive technology of choice for the nation's largest banks, thrifts, mortgage securities issuers and investors. Moreover, the ability to easily adjust the model to market anomalies and unusual collateral types has further enhanced its value to the market, especially in these times of rapid change.
About First American LoanPerformance
First American LoanPerformance is a subsidiary of First American CoreLogic, Inc., and a member of The First American Corporation (NYSE: FAF) family of companies. First American LoanPerformance databases track the delinquency and prepayment performance of 50 million active individual mortgage payments per month and provide loan-level information on more than $2.2 trillion in nonagency mortgage-backed and asset-backed securities. The company’s data and suite of predictive prepayment and risk modeling solutions enable mortgage originators, servicers, securities issuers and investors to make informed business decisions about credit risk, loss mitigation, customer retention, securitization and investment. For additional information, visit www.loanperformance.com and www.facorelogic.com.
About The First American Corporation
The First American Corporation (NYSE: FAF), a FORTUNE 500® company that traces its history to 1889, is America’s largest provider of business information. First American combines advanced analytics with its vast data resources to supply businesses and consumers with valuable information products to support the major economic events of people’s lives, such as getting a job, renting an apartment, buying a car or house, securing a mortgage and opening or buying a business. The First American Family of Companies, many of which command leading market share positions in their respective industries, operate within five primary business segments, including: Title Insurance and Services, Specialty Insurance, Mortgage Information, Property Information and First Advantage. With revenues of $8.5 billion in 2006, First American has approximately 2,100 offices throughout the United States and abroad. More information about the company and an archive of its press releases can be found at www.firstam.com.