Digital Risk Advice to Warehouse Lenders: Develop And Manage to Risk Benchmarks

Digital Risk Participates at PwC and The Bank of New York Mellon’s "Rebuilding the Mortgaged Market, Loan by Loan" Event 

Maitland, FL (November 19, 2009) - Digital Risk, LLC, the leading next-generation asset management solutions provider to the $4.2 trillion residential mortgage industry, announced today that Managing Director Jeff Taylor participated in the Warehouse Lending and Finance – The New Landscape panel discussion at a Mortgage Backed Securities event sponsored by PricewaterhouseCoopers and The Bank of New York Mellon. Other panelists at the event held yesterday in Washington, D.C, included representatives from Fannie Mae, MERS, Silvergate Bank and K&L Gates.

The panel discussions centered on ways that warehouse lenders can protect themselves from unwarranted risks. Among his remarks, Mr. Taylor pointed out that while credit quality is currently abnormally high, underwriting quality remains suspect. In addition, technology enabled fraud is on the rise but there is little appetite for law enforcement agencies to pursue losses under $1,000,000.

"Our advice: turn these challenges into a competitive advantage," said Mr. Taylor. "Given recent events, everyone involved in warehouse lending has elevated concerns about fraud and underwriting risks. We recommend that our clients require all loans undergo an automated fraud detection process plus a monthly sampling of loans be provided by each originator to a third party for a quality and underwriting review. With that benchmark and the continued refinement of the process, each subsequent month’s scorecard provides valuable data that highlights error rates and ultimately the warehouse lender’s portfolio quality trend."

“If you are a warehouse lender raising capital, use your commitment to risk management as a differentiator between you and your competition – show that you’ve learned from the previous cycle and are taking risk mitigation seriously. You can also differentiate yourself with your clients because your risk mitigation efforts also help clients avoid repurchases. We believe that the mortgage business will be rebuilt and the shrewdest warehouse lenders will avail themselves of these new risk mitigation tools and methodologies to protect their capital.”

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.

---

2009 | 2008 | 2007 | 2006