New RiskModel Measures Payment Shock, Teaser Rates, Price Appreciation

Version 3.0 Now Available

San Francisco, CA- July 27, 2004- LoanPerformance, a leading research and analytics company serving the mortgage industry and Wall Street, today announced the availability of version 3.0 of its RiskModel analytical tool at its 2004 Risk Summit in Carlsbad, CA.

LoanPerformance RiskModel 3.0 is the most advanced tool available for projecting future prepayments, defaults, losses and cash flows for residential mortgage portfolios or individual loans. In addition, it is the only commercially-available model 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.

“This release represents a major forecasting advancement that benefits our clients by increasing the precision of their pricing and reserve setting,” said Ralph DeFranco, Ph. D., director of product management at LoanPerformance. “We are very excited about extending our contribution to improving the safety, soundness, and profitability of our clients.”

The comprehensive release provides new, advanced scenario modeling of the impact of “payment shock” and teaser rates on adjustable rate mortgages (ARMs), and the effect of housing price appreciation on prepayment behavior. In addition, RiskModel 3.0 now utilizes an unparalleled 23 modeling factors, including the refinance incentive, seasonality, and loan size. All factors were re-estimated using the most recent data from LoanPerformance’s loan level mortgage databank of over 46 million active loans - the industry’s largest such data source.

This Windows-based software program 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 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 futures for interest rates and housing prices is just one of the reasons that the RiskModel is the predictive technology of choice for the nation's largest banks, thrifts, and ABS/MBS issuers.

For more information about RiskModel, please call the LoanPerformance representative in your area: West – Jim Kinnebrew (415-536-3523) Midwest – Charles DiMascio (909-593-0141) NY to DC Corridor – Connie Keim (973-226-0084) New England, PA, OH – Brian Gunn (415-536-3537) Southeast – Debra Donan (908- 304-0263).

About LoanPerformance
San Francisco, CA-based LoanPerformance (formerly MIC) is a leading data research and analytics company serving the mortgage industry and Wall Street. LoanPerformance tracks the payment performance of 90% of the outstanding prime mortgages in the U.S, 65% of the outstanding subprime market and 80% of the private (non-agency) mortgage securities market. LoanPerformance aggregated databases and analytical tools enable financial service institutions, Wall Street analysts, and mortgage investors to make more informed decisions by integrating robust data and analytics into their credit risk and securitization processes. For more information, visit www.loanperformance.com, or call 415-536-3500.

©2004, LoanPerformance. All Rights Reserved. LoanPerformance and Risk Model are trademarks of LoanPerformance, Inc.

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