First American Launches Mortgage Fraud Scoring Tool

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First American Data & Analytics has debuted its AppIntelligence Score (AI Score) fraud solution: a new fraud pattern-recognition score that enables lenders and investors to identify the risk of fraud and early payment default on both new mortgage applications or a portfolio.

AI Score, part of the division’s AppIntelligence Suite, delivers a highly accurate score that significantly reduces review volume and false positives and uses proprietary predictive modeling to give a truer picture of where fraud and early payment default risk are likely to occur, the company says. For example, loans with the highest AI Score, usually about 10% of total application volume, account for 50% or more of total fraud risk. This targeting enables lenders to focus their reviews on the most at-risk loans, while streamlining loan approvals and reducing operational costs.

AI Score utilizes First American Data & Analytics’ proprietary predictive fraud indices, employing both natural and artificial intelligence machine learning technologies. It simultaneously runs proprietary sub-models for risk, including synthetic identity, income, employment, early payment default (EPD), undisclosed debt and loan participant risk review.

In addition, AI Score has a retro-scoring capability, so lenders can run a portfolio to identify which loans would have been flagged by the model. AI Score produces a scale of scores from low to high risk that can be customized to the lender’s risk tolerance. AI Score incorporates First American’s proprietary and consortium fraud data that tracks and evaluates millions of past underwriter clearances to evaluate risk level. This data is then fed back into the model for continuous machine learning.

“The ability to analyze millions of alerts that underwriters have cleared, and then feed that information back into the model, is what makes the AI Score one of the most sophisticated models on the market,” says Robert Karraa, president of First American Data & Analytics. “By targeting the most at-risk loans, AI Score will help lenders streamline the number of review cycles and still uncover the highest risk areas of fraud.”

For more information about AppIntelligence Suite, click here.

Photo: Robert Karraa

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