Digital Risk Announces Coral Fraud Detection Score And Plates Fraud Check Score Products

A Paired Solution of Tools for Front End Fraud Prevention and Back End Fraud Detection.

Maitland, FL (October 19, 2009) - Digital Risk, LLC, the nation’s largest provider of forensic loan review services, as well as front end fraud analytical solutions, announced the offering of CORAL™ Fraud Detection Score (CORAL™) and PLATES™ Fraud Check Score (PLATES™), designed to defect fraud in both front end loan origination and back end loan quality control processes.

CORAL™ is based on the commonality of fraud findings discovered by the company’s 600 forensic analysts during their monthly forensic reviews of more than 30,000 residential mortgage loans representing more than $72B annually. Drawing upon this abundant forensic loan experience, Digital Risk’s Analytics Department classified the extensive database of documented fraud into six major categories:

• Income Mis-Representation
• Undisclosed Liabilities
• Appraisal Fraud
• Occupancy Misrepresentation
• Predatory Lending
• Repurchase Risk

Closely collaborating with the underwriters who identify fraud on a daily basis, the expert financial modelers developed the most comprehensive front end fraud detection scoring models in the industry. CORAL™ is a composition of six sub-scoring models, with each targeting a specific type of fraud in the six major categories of commonly found fraud. CORAL™ was built using robust statistical processes to ensure the correlations identified in the data are statistically sound reflecting the careful study of causality of fraud findings and their related loan characteristics. CORAL™ balances the preciseness of statistical analysis with the expertise of the forensic underwriters to ensure the conformity to business intuitions and reasonableness. The resulting outcome is a set of analytical scoring models that solidly rank the probability of fraud in a defaulted loan, based on commonly available loan origination characteristics. The assessment of fraud propensity by CORAL™ provides investors the ability to intelligently select the loans for forensic review to maximize expected putback returns, as well as providing new loan originators the ability to prescreen potential exposure to fraud.

Once CORAL™ isolates high risk mortgage loans, PLATES™ comes into play with its highly automated and detailed analysis of a wide array of loan specifics. Supplied with only the Mortgage Origination Date, Loan Amount, Borrower’s Name, Social Security Number, and Property Address, PLATES™ automatically interrogates various third party information sources to authenticate and validate the borrower’s identity, occupancy, income, liabilities, assets and collateral valuation, on a real-time basis. By accessing the vast amount of information in the public domain, the modelers draw statistical inferences between the suspect data discrepancies and the actual claim findings in Digital Risk’s immense database. Many investors will use these products in tandem, relying on CORAL™ to identify suspect fraud loans from the general population and PLATES™ to then perform a rigorous real time inspection of each suspect loan. However, investors faced with a portfolio riddled with potential imminent losses, may choose to use PLATES™ to review the entire portfolio due to its ability to deliver highly accurate real time results. For new loan originators, PLATES™ can effectively uncover hidden loan deficiencies before the loans are even closed.

Extending from its core competency of forensic loan file review, Digital Risk is providing its expertise to the mortgage industry to broadly benefit both mortgage investors and mortgage lenders alike. “With the offering of these two compelling new products, the success of Digital Risk is benefiting the mortgage industry as a whole and is a step to restoring investors’ confidence in mortgage backed securities” said Peter Kassabov, Digital Risk Chairman and CEO.

“While Digital Risk has claimed the top spot in the forensic loan review provider in the nation, the even greater opportunity for Digital Risk is to help the industry ensure fraud is minimized in every new loan originated from this point forward.” added Jeff C. Taylor, Chief Business Development Officer of Digital Risk, LLC.

About Digital Risk

With offices in New York, Dallas, and Orlando, Digital Risk, LLC is a leading next-generation integrated portfolio management solutions provider to the $4.2 trillion residential mortgage industry. Digital Risk is the only company in the market that combines proprietary predictive modeling analytics with expert forensic underwriting services, thus providing its clients an integrated 360° portfolio management solution to maximize returns and minimize losses. The Company’s predictive analytics, when integrated with its asset management services, delivers an effective set of solutions that minimize credit risk, pinpoint and prevent fraud, identify and execute loss mitigation and asset recovery opportunities, execute loan repurchase and loss indemnification, ensure regulatory compliance, assure quality, and maximize portfolio returns, among others.

For additional information contact MORSE COMMUNICATIONS at 203-313-1464.

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