FraudMark™ for Origination
FraudMark™ for Investment Banking
BasePoint EPD™ alert
BrokerWatch™
PatternWatch™
FraudMark™ for Origination
Most fraud products in the mortgage industry are based on comparisons between application information and third-party data sources. While this approach worked well for many years, it's no longer sufficient. In today's environment of higher application volumes, lenders, due diligence firms, and investment banks are driving for greater loan review efficiency and a more targeted approach to identifying which applications may be fraudulent. Due to the high false positives inherent in data verification tools, organizations are often presented with an unmanageable number of applications to review due to data mismatches. BasePoint's FraudMark™ solution pinpoints those applications that are likely to have material misrepresentation that will lead to a financial loss.BasePoint's FraudMark uses patent-pending technology that combines two highly effective approaches for finding fraud: behavioral trends for applicants, brokers, loan officers, lenders, program types, appraisers, etc., as well as historical patterns of both fraudulent and non-fraudulent loan applications. By combining both techniques, FraudMark provides a much higher degree of predictability to precisely identify which applications have the greatest risk of fraud. This significantly reduces the overhead cost of retrieving expensive data to match against loan applications. In addition, FraudMark includes model performance reports that indicate performance metrics including how many fraud applications will be detected at each score level, the false positive at each score level, as well as the number of applications anticipated to score within each score level. This gives you the ability to set and change staffing, real-time decision criteria, and risk tolerance levels based on your individual risk management and production goals.
The credit card industry has driven down fraud losses by 70% through the use of pattern recognition technologies. The analytic advancements of FraudMark now enable the mortgage industry to go beyond this. It provides you with the ability to cost effectively score all of your loan applications in real-time, drivedown your fraud losses, and increase overall production.
FraudMark Product Brief (pdf)FraudMark™ for Investment Banking
BasePoint's FraudMark for Investment Banking is part of a suite of fraud detection software designed to bring next generation fraud solutions to all parts of the mortgage industry. By using limited bid tape data, FraudMark enables investment backs to decrease fraud risk in their investment portfolios by automatically assessing the fraud risk in a total pool of loans available for sale, as well as identifying the fraud risk of individual loans so that those with the highest associated fraud risk can be selected for further investigation during the due diligence process.BasePoint scores each individual loan in the trade files for risk of fraud. High fraud scores indicate a need to review the loan during the due diligence process. The scoring process takes less than 24 hours, and the trade files are returned to the investment bank along with the scores. This enables investment banks to proactively identify fraud risk in existing securities in an effort to detect and prevent potential financial loss before significant delinquency occurs.
FraudMark for Investment Banking Product Brief (pdf)BasePoint EPD™ alert
BasePoint EPD™ alert is the industry’s first and only pattern recognition solution designed specifically for predicting the risk of early payment default (EPD) on mortgage loans. BasePoint EPD alert is a statistical pattern recognition score designed to assess the risk of early payment default in mortgage applications and loans in real-time, and is designed for use by mortgage originators prior to funding of loans and by investment banking firms prior to the purchase of loans on the secondary market. With the growing problem of early mortgage defaults, BasePoint EPD alert uniquely meets lender and investment bank demand for more sophisticated, analytics-based solutions by identifying and stopping EPD losses before they are incurred. BasePoint EPD alert was built based on historical patterns of both performing and non-performing mortgage loans from the BasePoint Mortgage Consortium of over 4 million loans. It is an efficient and accurate solution that identifies those loans most at risk for early payment default. Initial tests revealed that BasePoint EPD alert detected over 50% of early payment defaults by reviewing only 10% of the applications. EPD alert provides both a risk score and specific risk indicators that help guide and expedite the investigative process. EPD alert is a complementary product to FraudMark, BasePoint’s predictive pattern recognition model to detect mortgage fraud for originators and investment banks. BasePoint recommends the use of BasePoint EPD alert and the FraudMark score together for optimal loss mitigation of fraud and EPD losses. These products can be used with other credit and compliance risk tools during the loan underwriting and loan trading due diligence processes to specifically identify early default risk, and have been shown to provide significant lift in detecting early payment default and fraud that would result in financial loss. Early detection of problem loans can cut losses in half, with minimal impact to production processes. EPD Product Brief (pdf)BrokerWatch™
Mortgage fraud can be committed by a variety of parties involved in the loan origination process. BasePoint's FraudMark™ patent-pending fraud detection product enables lenders to identify fraudulent loans before they are funded. However, fraudsters continue to find ways to escape detection, and another view into the loan portfolio can highlight additional fraud risk. Through a broader analysis, BrokerWatch™ reviews loan data from the broker perspective. BrokerWatch provides powerful insight to pinpoint and elaborate on brokers who are associated with high loan fraud and default rates, helping lenders prevent fraud by going directly to a key source of applicants. Due to the high number of brokers, reviewing each broker's set of contributed loans is an overwhelming task. BasePoint's BrokerWatch simplifies the identification process by enabling lenders to analyze brokers based on past performance measurements, producing a risk score that focuses investigations on the brokers contributing the highest risk applications. By being proactive with researching and monitoring brokers, lenders can reduce fraud, early payment default and repurchase/discount loans. WatchSuite Product Brief (pdf)PatternWatch™
As fraud perpetrators create new methods to escape fraud detection, or move to new locations, lenders and investment banks are vulnerable to losses given the difficulty to detect these behavior patterns. BasePoint’s PatternWatch helps detect fraud schemes early, delivering actionable reports. PatternWatch is a fraud prevention service that uses pattern recognition techniques and fraud detection expertise to monitor loans, both pre and post funding, and identify subtle fraud patterns as they emerge in a portfolio.PatternWatch uses BasePoint’s advanced link analysis software and fraud detection experts to analyze historical data and current pipeline or funded loans, identifying patterns to reveal hidden, organized fraud schemes such as:
Income and Employment Misrepresentations
Falsified Verification of Rent
Non-Disclosed Non-Arms Length
Straw Buyers
Occupancy Fraud
PatternWatch enables clients to cost-effectively leverage BasePoint’s pattern recognition software and team of experienced fraud data analysts and investigators to identify serious fraud schemes occurring in their portfolio. Monitoring loans on an ongoing basis, patterns are identified quickly, often enabling lenders to stop suspicious loans pre-funding or before an early payment default.
WatchSuite Product Brief (pdf)