CHALLENGE: Incidences of mortgage fraud are exploding and government sponsored enterprises are demanding repurchases at record levels. With shrinking origination margins and warehouse lenders becoming increasingly risk averse, how can a mortgage originator cost effectively enhance loan quality?

SOLUTION: After careful consultation with the client, Digital Risk deployed a comprehensive risk mitigation solution designed to reduce repurchases and improve secondary market execution. First, Digital Risk integrated a customized version of RiskIQ to the originator’s loan origination system (LOS). A RiskIQ analysis featuring actionable fraud red flags and statistical scoring was performed on each loan. Next, utilizing RiskIQ results and statistical sampling methods, Digital Risk created a pre-closing intervention program designed to stop repurchases in their tracks. Then, Digital Risk analysts execute a post-closing quality control program designed to identify process improvement opportunities. Finally, Digital Risk’s analysts meet weekly with client operational leadership to improve process and review results.

RESULTS: Within six months, the client reported a 35% decrease in fraud related EPDs. Cost per loan was reduced by 8.3% resulting from increased automation and reduced false positives.

SOLUTION: Quality Management

ANALYTICAL TOOLS: Risk IQ, Plates

EXPERT SERVICES: Quality Control, Fraud Detection and Prevention Operational Reviews Collateral Advisory Services (CAS)