Automated loan risk assessment system and method

• US 8,386,378 B2
• Filed: 10/27/2010
• Issued: 02/26/2013
• Est. Priority Date: 11/13/2001
• Status: Expired due to Term

• Current Assignee: First American Financial Corporation
• Original Assignee: Interthinx Incorporated (First American Financial Corporation)
• Inventors: Halper, Steven C., Wilson, Constance A., Hourigan, Stephen M.
• Primary Examiner(s): JOHNSON, GREGORY L
• Application Number:
  US12/913,305
• Publication Number:
  US 20110106693A1
• Time in Patent Office: 853 Days
• Field of Search: 705 35- 40
• US Class Current: 705/38
• CPC Class Codes: G06Q 40/00 Finance; Insurance; Tax strategies; Processing of corporate or income taxes
• CPC Class Codes: G06Q 40/02 Banking, e.g. interest calculation or account maintenance credit or loans G06Q40/03
• CPC Class Codes: G06Q 40/03 Credit; Loans; Processing thereof

Abstract

An automated loan risk assessment system and method are described. The system is adapted to receive information about a loan or an insurance application requesting insurance to cover same. The system calculates a risk score for the loan based on a plurality of risk factors including at least two of a fraud risk factor, a credit risk factor and a property valuation risk factor. The risk score can be used by a loan service provider in deciding whether or not to fund or insure the loan.

Claims

1. An automated loan risk assessment system, comprising:

means for receiving information about a loan;

means for detecting a plurality of variances associated with the information about the loan;

means for scoring each variance detected by the means for detecting the plurality of variances;

means for calculating a numeric risk score for the loan based on a fraud risk factor, an underwriting risk factor, and a property valuation risk factor, said means for calculating combines each score generated by the means for scoring each variance to calculate the numeric risk score;

means for assigning a risk category to the loan based on the numeric risk score; and

means for generating a computer screen for displaying the numeric risk score and the risk category to a user.

2. The automated loan risk assessment system of claim 1, wherein the risk calculation means comprises:

means for calculating a fraud risk score;

means for calculating an underwriting risk score; and

means for calculating a property valuation score, wherein the numeric risk score for the loan is based on the fraud risk factor, an underwriting risk factor, and the property valuation risk score.

3. The automated loan risk assessment system of claim 2, wherein the fraud risk score calculation means comprises:

means for storing general information about borrowers and properties; and

means for detecting one or more variances among the loan information or between the loan information and the general information, each variance having a certain degree, such that the fraud risk score is based on the detected variances and the degrees thereof.

4. The automated loan risk assessment system of claim 3, further comprising means for calculating a variance score for each detected variance based on the degree thereof, wherein the fraud risk score represents the sum of the variance scores.

5. The automated loan risk assessment system of claim 3, further comprising means for determining one or more steps needed to resolve the plurality of variances.

6. The automated loan risk assessment system of claim 3, further comprising means for tracking the status of the plurality of variances.

7. The automated loan risk assessment system of claim 2, wherein the underwriting risk score calculation means comprises means for obtaining the underwriting risk score from an underwriting risk score provider, and wherein the property valuation risk score calculation means comprises means for obtaining a property valuation risk score from a property valuation score provider.

8. The automated loan risk assessment system of claim 2, further comprising means for converting the fraud risk factor, an underwriting risk factor, and the property valuation risk score.

9. The automated loan risk assessment system of claim 8, wherein the means for converting comprises means for weighting the fraud risk factor, an underwriting risk facator, and the property valuation risk score based on a level of risk associated therewith such that the risk score is based on the weights assigned thereto.

10. The automated loan risk assessment system of claim 8, wherein the means for converting comprises converting the fraud risk fator, an underwriting risk factor, and the property valuation risk score such that all of the scores are compatible, and wherein the numeric risk score represents an average of the compatible scores.

11. The automated loan risk assessment system of claim 1, wherein the loan information includes insurance information related to at least one insurance claim being asserted against an insurance policy to which a loan is subject, and wherein the means for calculating a numeric risk score comprises means for calculating a numeric risk score for the claim based on a fraud risk factor, an underwriting risk factor, and a property valuation risk factor.

12. The automated loan risk assessment system of claim 1, further comprising means for interfacing at least one pricing scheme of a loan service provider such that a loan or an insurance policy for a loan is automatically priced based on the numeric risk score calculated therefor.

13. The automated loan risk assessment system of claim 1, wherein the numeric risk score is based on a combination of the fraud risk score factor, the underwriting risk factor and the property valuation risk factor.

14. An automated loan risk assessment system, comprising:

a mechanism configured to receive information about a loan;

a mechanism configured to detect a plurality of variances associated with the information about the loan;

a mechanism configured to score each variance detected by the mechanism configured to detect the plurality of variances;

a mechanism configured to calculate a numeric risk score for the loan based on a fraud risk factor, an underwriting risk factor, and a property valuation risk factor, said mechanism configured to calculate the numeric risk score by combining each score generated by the mechanism configured to score each variance to calculate the numeric risk score;

a mechanism for assigning a risk category to the loan based on the numeric risk score; and

a mechanism for generating a computer screen for displaying the numeric risk score and the risk category to a user.

15. The automated loan risk assessment system of claim 14, wherein the risk calculation mechanism comprises:

a mechanism configured to calculate a fraud risk score;

a mechanism configured to calculate an underwriting risk score; and

a mechanism configured to calculate a property valuation score, wherein the numeric risk score for the loan is based on the fraud risk factor, an underwriting risk factor, and the property valuation risk score.

16. The automated loan risk assessment system of claim 15, wherein the fraud risk score calculation mechanism comprises:

a mechanism configured to store general information about borrowers and properties; and

a mechanism configured to detect one or more variances among the loan information or between the loan information and the general information, each variance having a certain degree, such that the fraud risk score is based on the detected variances and the degrees thereof.

17. The automated loan risk assessment system of claim 16, further comprising a mechanism configured to calculate a variance score for each detected variance based on the degree thereof, wherein the fraud risk score represents the sum of the variance scores.

18. The automated loan risk assessment system of claim 16, further comprising a mechanism configured to determine one or more steps needed to resolve the one or more detected variances.

19. The automated loan risk assessment system of claim 18, further comprising means for tracking the status of the one or more detected variances.

20. The automated loan risk assessment system of claim 16, wherein the underwriting risk score calculation mechanism comprises a mechanism configured to obtain the underwriting risk score from an underwriting risk score provider, and wherein the property valuation risk score calculation mechanism comprises a mechanism configured to obtain a property valuation risk score from a property valuation score provider.

21. The automated loan risk assessment system of claim 16, further comprising a mechanism configured to convert the fraud risk factor, an underwriting risk factor, and the property valuation risk score.

22. The automated loan risk assessment system of claim 21, wherein the converting mechanism comprises a mechanism configured to weight the fraud risk factor, an underwriting risk factor, and the property valuation risk score based on a level of risk associated therewith such that the risk score is based on the weights assigned thereto.

23. The automated loan risk assessment system of claim 21, wherein the converting mechanism is configured to convert the fraud risk score, an underwriting risk factor, and the property valuation risk score such that all of the scores are compatible, and wherein the numeric risk score represents an average of the compatible scores.

24. The automated loan risk assessment system of claim 14, wherein the loan information includes insurance information related to at least one insurance claim being asserted against an insurance policy to which a loan is subject, and wherein the mechanism for calculating the numeric risk score comprises a mechanism configured to calculate a numeric risk score for the claim based on a fraud risk factor, an underwriting risk factor, and a property valuation risk factor.

25. The automated loan risk assessment system of claim 14, further comprising a mechanism configured to interface at least one pricing scheme of a loan service provider such that a loan or an insurance policy for a loan is automatically priced based on the numeric risk score calculated therefor.

26. The automated loan risk assessment system of claim 14, wherein the numeric risk score is based on a combination of the fraud risk score, the underwriting risk score, and the property valuation risk score.

27. A non-transitory computer-readable medium whose contents cause a computer system to assess the risk associated with funding or insuring a loan by performing the steps of:

receiving information about a loan;

detecting a plurality of variances associated with the information about the loan;

scoring each variance detected by the computer system;

calculating at the computer system a numeric risk score for the loan based on a fraud risk factor, an underwriting risk factor, and a property valuation risk factor by combining each score for each variance detected by the computer system to calculate the numeric risk score;

assigning at the computer system a risk category to the loan based on the numeric risk score; and

displaying a computer screen to a user which includes the numeric risk score and the risk category.

28. The computer-readable medium of claim 27, wherein the step of calculating the numeric risk score further comprises the steps of:

calculating a fraud risk score;

calculating an underwriting risk score; and

calculating a property valuation score, wherein the numeric risk score for the loan is based on the fraud risk factor, an underwriting risk factor, and the property valuation risk score.

29. The computer-readable medium of claim 28, wherein the step of calculating the fraud risk score comprises:

storing general information about borrowers and properties; and

detecting one or more variances among the loan information or between the loan information and the general information, each variance having a certain degree, such that the fraud risk score is based on the detected variances and the degrees thereof.

30. The computer-readable medium of claim 28, further comprising the step of calculating a variance score for each detected variance based on the degree thereof, wherein the fraud risk score represents the sum of the variance scores.

31. The computer-readable medium of claim 28, further comprising the step of determining one or more steps needed to resolve the plurality of variances.

32. The computer-readable medium of claim 28, further comprising the step of tracking the status of the plurality of variances.

33. The computer-readable medium of claim 27, wherein the step of calculating the underwriting risk score comprises obtaining the underwriting risk score from an underwriting risk score provider, and wherein the step of calculating the property valuation risk score comprises obtaining a property valuation risk score from a property valuation score provider.

34. The computer-readable medium of claim 27, further comprising the step of converting the fraud risk factor, an underwriting risk factor, and the property valuation risk score.

35. The computer-readable medium of claim 34, wherein the step of converting comprises weighting the fraud risk factor, an underwriting risk factor, and the property valuation risk score based on a level or risk associated therewith such that the numeric risk score is based on the weights assigned thereto.

36. The computer-readable medium of claim 34, wherein the step of converting comprises converting the fraud risk factor, an underwriting risk factor, and the property valuation risk score such that all of the scores are compatible, and averaging the compatible scores.

37. The computer-readable medium of claim 27, wherein the loan information includes insurance information related to at least one insurance claim being asserted against an insurance policy to which a loan is subject, and wherein the medium further comprises the step of calculating a numeric risk score for the claim based on a fraud risk factor, an underwriting risk factor, and a property valuation risk factor.

38. The computer-readable medium of claim 27, further comprising the step of interfacing at least one pricing scheme of a loan service provider such that a loan or an insurance policy is automatically priced based on the numeric risk score calculated therefor.

39. The computer-readable medium of claim 27, wherein the numeric risk score is based on a combination of the fraud risk score, the underwriting risk score, and the property valuation risk score.

40. A computer-implemented method of assessing the risk associated with the funding or insuring of a loan, comprising:

receiving information about a loan at a computer system;

detecting using the computer system a plurality of variances associated with the information about the loan;

scoring each variance detected by the computer system;

calculating at the computer system a numeric risk score for the loan based on a fraud risk factor, an underwriting risk factor, and a property valuation risk factor by combining each score for each variance detected by the computer system to calculate the numeric risk score;

assigning at the computer system a risk category to the loan based on the numeric risk score; and

displaying a computer screen to a user which includes the numeric risk score and the risk category.

41. The computer-implemented method of claim 40, wherein the step of calculating the numeric risk score further comprises the steps of:

calculating a fraud risk score;

calculating an underwriting risk score; and

calculating a property valuation score, wherein the numeric risk score for the loan is based on the fraud risk factor, an underwriting risk factor, and the property valuation risk score.

42. The computer-implemented method of claim 41, wherein the step of calculating the fraud risk score comprises:

storing general information about borrowers and properties; and

detecting one or more variances among the loan information or between the loan information and the general information, each variance having a certain degree, such that the fraud risk score is based on the detected variances and the degrees thereof.

43. The computer-implemented method of claim 42, further comprising the step of calculating a variance score for each detected variance based on the degree thereof, wherein the fraud risk score represents the sum of the variance scores.

44. The computer-implemented method of claim 42, further comprising the step of determining one or more steps needed to resolve the plurality of variances.

45. The computer-implemented method of claim 42, further comprising the step of tracking the status of the plurality of variances.

46. The computer-implemented method of claim 42, wherein the step of calculating the underwriting risk score comprises obtaining a credit risk score from a credit risk score provider, and wherein the step of calculating the property valuation risk score comprises obtaining a property valuation risk score from a property valuation score provider.

47. The computer-implemented method of claim 41, further comprising the step of converting the fraud risk factor, an underwriting risk factor, and the property valuation risk score.

48. The computer-implemented method of claim 47, wherein the step of converting comprises weighting the fraud risk factor, an underwriting risk factor, and the property valuation risk score based on a level of risk associated therewith such that the risk score is based on the weights assigned thereto.

49. The computer-implemented method of claim 47, wherein the step of converting comprises converting the fraud risk factor, an underwriting risk factor, and the property valuation risk score such that all of the scores are compatible, and averaging the compatible scores.

50. The computer-implemented method of claim 41, wherein the loan information includes insurance information related to at least one insurance claim being asserted against an insurance policy to which the loan is subject, and wherein the step of calculating a numeric risk score comprises calculating a numeric risk score for the claim based on a fraud risk factor, an underwriting risk factor, and a property valuation risk factor.

51. The computer-implemented method of claim 41, further comprising the step of interfacing at least one pricing scheme of a loan service provider such that a loan or insurance policy is automatically priced based on the numeric risk score calculated therefor.

52. The computer-implemented method of claim 41, wherein the numeric risk score is based on a combination of the fraud risk score, the underwriting risk score, and the property valuation risk score.

53. A method for assessing risk associated with a loan, comprising the steps of:

receiving at a computer system information relating to a loan;

detecting using the computer system a plurality of variances associated with the information; and

if a plurality of variances are detected;

scoring each variance to produce a plurality of scores;

processing the plurality of scores at the computer system to calculate a risk score for the loan based upon the plurality of scores;

assigning a risk category to a loan based upon the risk score;

generating a report which includes indicia indicative of the risk category and the risk score; and

transmitting the report to a user of the computer system.