02.19.07
BasePoint Releases Impressive Mortgage Fraud Study
BasePoint Analytics, a provider of scientific fraud anaysis and consulting services, announced the results of a new scientific study which found that up to 70 percent of early payment defaults (EPD) on mortgages can be linked to significant misrepresentation on the original loan application. The purpose of the study was to investigate the link between fraud and payment trends during the early life of the loan.
The study concluded that loans with gross misrepresentations were five times more likely to default in the first six months than others. More importantly, the study concluded that models could be used early in the loan process to help lenders predict those loans likely to default within the first six months. This would allow loans to be rejected pre-funding. According to BasePoint, its product, called FraudMark product could accurately identify approximately 40 percent of consumers who, if funded, would stop paying within the first six months.
To read a more complete article, see BasePoint Analytics Article. http://www.basepointanalytics.com/newsfiles/NR%20-%20BasePoint%20Finds%20EPD%20Linked%20to%20Fraud%2002-12-2007.pdf