BasePoint Analytics, a provider of scientific fraud analytics and consulting services, said Tuesday that it has released the second generation of its fraud detection suite, called FraudMark for Origination. BasePoint’s FraudMark predicts the likelihood of a loan containing fraud that could result in financial loss to a lender. According to BasePoint, the newest version of FraudMark has been updated to detect the most current fraud patterns and trends, incorporating newly-tailored model segments to adapt to the unique portfolio characteristics of prime, Alt-A and non-prime loans. FraudMark 2.0 adds several new features that BasePoint said improves the platform’s predictive performance and client ease of use. The platform’s Dynamic TRAITS module has been upgraded so that individual entities involved in the mortgage transaction, such as brokers and account executives, are scored on their fraud risk. New risk tables as well as enhanced data evaluation using the Social Security Number issuance table and death master files are included in the platform’s fraud evaluation. BasePoint says all of these model components are then incorporated into the final FraudMark score to improve predictive power.
“We have found BasePoint’s FraudMark solution to be highly effective in catching potentially fraudulent mortgage applications and we are very pleased with results we’ve seen to date,â€? said Lenice Johnson, senior vice president and COO for NC Capital Corporation, New Century Financial Corporation’s secondary marketing subsidiary. “We have upgraded to FraudMark 2.0 to use this solution more widely across our business, and we look forward to higher levels of productivity and continued acceleration in the funding of quality loans.â€? Lenders traditionally have relied on a variety of tools including database verification to detect fraud. While database verification serves an important purpose in confirming fraud, BasePoint CEO Tim Grace said that using it alone results in extremely high false positive rates, often in excess of 100:1 and requiring over 50 percent of applications to be reviewed, which places an unnecessary burden and expense on the loan review process. FraudMark aims to relieve that burden, he said. According to Grace, FraudMark’s detection rates are achieved in a production environment with less than 10:1 false positives, while reviewing only 5 percent of an application pool. “The analytic advancements of FraudMark enable mortgage lenders to cost effectively score all of their loan applications in real-time, drive down their fraud losses, and increase overall production,â€? said Grace. “FraudMark has been very well received by lenders in their aggressive fight against fraud. Our customers can depend on us to continue to innovate as we have with FraudMark 2.0 and bring them next generation technology and tools to combat fraud.â€? Grace said that within the last 12 months, lenders using FraudMark have prevented the funding of more than $650 million in suspicious loans.
