First American LoanPerformance Announces Major Enhancements to Its RiskModel Analytics Solution
Latest Version Features New Subprime Loan Models, First-Ever Model for Home Equity Lines of Credit and Application Programming Interface
SAN FRANCISCO, March 6, 2007 – First American LoanPerformance, a leader in residential mortgage data and analytics for the mortgage industry and Wall Street, announced today the availability of the latest version of its RiskModel analytics solution for forecasting future mortgage prepayments, defaults, losses and projected cash flows. Highlights of the new release include:
New Subprime Models
- Expanded subprime prepayment and early delinquency models to reflect the changing dynamics of the subprime mortgage market.
- Increased precision in capturing prepayment sensitivity for adjustable-rate mortgage loans subject to interest-rate resets.
- Refined prepayment model to more accurately forecast the influence of prepayment penalties on prepayment speeds.
New Application Programming Interface (API)
- A Windows®-based API facilitates the seamless integration of RiskModel into a client’s internal business processes, systems and third-party applications, providing significant efficiencies in time and decision quality.
New Open Database Connectivity (ODBC) and OLE-DB (Microsoft® API) Connectivity
- API easily accepts data from any ODBC-compliant source or any OLE-DB-compliant source, and can be accessed via C++ and other programming languages or directly through command line prompts.
New Home Equity Model
- A newly developed forecasting and simulation tool with econometric transition models projecting utilization, default, and prepayment behavior for home equity lines of credit is integrated into the model, which is available in a Windows-based API format.
“This version of the RiskModel significantly increases the precision of our clients’ pricing and loss reserve-setting practices,” said Dan Feshbach, chief executive officer and president of First American LoanPerformance. “By integrating both API and database connectivity, our clients will now have a tremendous opportunity to upgrade the speed and control of their mortgage risk assessment processes.”
RiskModel is the leading commercially available solution that simultaneously considers both prepayment and default risk while integrating the effects of borrower behavior, interest rate fluctuations and housing price movements on residential mortgages. RiskModel contains multiple statistical models that can be used with prime, alt-A, nonprime loans and home equity lines of credit. By enabling institutions to more accurately set loan loss reserves, RiskModel performs 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 and 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, and mortgage securities issuers.
First American LoanPerformance is a subsidiary of First American Real Estate Solutions and a member of The First American Corporation (NYSE: FAF) family of companies. LoanPerformance’s databases track the delinquency and prepayment performance of 50 million active individual mortgage payments per month and provide loan-level information on more than $1.6 trillion in nonagency mortgage 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.firstamres.com.
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 Risk Mitigation and Business Solutions. 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.
Media Contact:
Carrie Gaska
Corporate Communications
The First American Corporation
(714) 250-3298
cgaska@firstam.com
Investor Contact:
Donna Dolan
Investor Relations
The First American Corporation
(714) 250-3677
dodolan@firstam.com
