Automated loan risk assessment system and method

• US 20030093366A1
• Filed: 01/14/2002
• Published: 05/15/2003
• Est. Priority Date: 11/13/2001
• Status: Active Grant

• Current Assignee: First American Financial Corporation
• Original Assignee: Interthinx Incorporated (First American Financial Corporation)
• Inventors: Hourigan, Stephen M., Wilson, Constance A., Halper, Steven C.
• Granted Patent: US 8,458,082 B2
• Time in Patent Office: Days
• 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; and

means for calculating a risk score for the loan based on a plurality of risk factors including at least two of a fraud risk factor, an underwriting risk factor and a property valuation risk factor, whereby the risk score can be used by a loan service provider in deciding whether or not to fund or insure the loan.

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 risk score for the loan is based on at least two of the fraud risk score, the underwriting risk score 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 one or more detected variances.

6. The automated loan risk assessment system of claim 3, further comprising means for tracking the status of the one or more detected 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 at least one of the fraud risk score, the underwriting risk score 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 at least one of the fraud risk score, the underwriting risk score and the property valuation risk score based on the 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 at least one of the fraud risk score, the underwriting risk score and the property valuation risk score such that all of the scores are compatible, and wherein the risk score represents an average of the compatible scores.

11. The automated loan risk assessment system of claim 1, further comprising means for assigning a risk category to the loan based on the risk score.

12. 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 risk score comprises means for calculating a risk score for the claim based on a plurality of risk factors including at least one of a fraud risk factor, an underwriting risk factor and a property valuation risk factor, whereby the risk score can be used by a loan service provider in deciding whether to allow or deny the claim.

13. 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 can be automatically priced based on the risk score calculated therefor.

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

15. An automated loan risk assessment system, comprising:

a mechanism adapted to receive information about a loan; and

a mechanism adapted to calculate a risk score for the loan based on a plurality of risk factors including at least two of a fraud risk factor, an underwriting risk factor and a property valuation risk factor, whereby the risk score can be used by a loan service provider in deciding whether or not to fund or insure the loan.

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

a mechanism adapted to calculate a fraud risk score;

a mechanism adapted to calculate an underwriting risk score; and

a mechanism adapted to calculate a property valuation score, wherein the risk score for the loan is based on at least two of the fraud risk score, the underwriting risk score and the property valuation risk score.

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

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

a mechanism adapted 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.

18. The automated loan risk assessment system of claim 17, further comprising a mechanism adapted 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.

19. The automated loan risk assessment system of claim 17, further comprising a mechanism adapted to determine one or more steps needed to resolve the one or more detected variances.

20. The automated loan risk assessment system of claim 17, further comprising means for tracking the status of the one or more detected variances.

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

22. The automated loan risk assessment system of claim 16, further comprising a mechanism adapted to convert at least one of the fraud risk score, the underwriting risk score and the property valuation risk score.

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

24. The automated loan risk assessment system of claim 22, wherein the converting mechanism is adapted to convert at least one of the fraud risk score, the underwriting score and the property valuation risk score such that all of the scores are compatible, and wherein the risk score represents an average of the compatible scores.

25. The automated loan risk assessment system of claim 15, further comprising a mechanism adapted to assign a risk category to the loan based on the risk score.

26. The automated loan risk assessment system of claim 15, 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 a risk score comprises a mechanism adapted to calculate a risk score for the claim based on a plurality of risk factors including at least one of a fraud risk factor, an underwriting risk factor and a property valuation risk factor whereby the risk score can be used by a loan service provider in deciding whether to allow or deny the claim.

27. The automated loan risk assessment system of claim 15, further comprising a mechanism adapted to interface at least one pricing scheme of a loan service provider such that a loan or an insurance policy for a loan can be automatically priced based on the risk score calculated therefor.

28. The automated loan risk assessment system of claim 15, wherein the risk score is based on a combination of the fraud risk score, the underwriting risk score and the property valuation risk score.

29. A 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; and

calculating 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.

30. The computer-readable medium of claim 29, wherein the step of calculating the 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 risk score for the loan is based on the fraud risk score, the underwriting risk score and the property valuation risk score.

31. The computer-readable medium of claim 30, 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.

32. The computer-readable medium of claim 31, 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.

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

34. The computer-readable medium of claim 31, further comprising the step of tracking the status of the one or more detected variances.

35. The computer-readable medium of claim 30, 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.

36. The computer-readable medium of claim 30, further comprising the step of converting at least one of the fraud risk score, the underwriting risk score and the property valuation risk score.

37. The computer-readable medium of claim 36, wherein the step of converting comprises weighting at least one of the fraud risk score, the underwriting risk score and the property valuation risk score based on the level or risk associated therewith such that the risk score is based on the weights assigned thereto.

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

39. The computer-readable medium of claim 29, further comprising the step of assigning a risk category to the loan based on the risk score.

40. The computer-readable medium of claim 29, 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 risk score for the claim based on a plurality of risk factors including at least one of a fraud risk factor, an underwriting risk factor and a property valuation risk factor, whereby the risk score can be used by a loan service provider in deciding whether to allow or deny the claim.

41. The computer-readable medium of claim 29, further comprising the step of interfacing at least one pricing scheme of a loan service provider such that a loan or an insurance policy can be automatically priced based on the risk score calculated therefor.

42. The computer-readable medium of claim 29, wherein the risk score is based on a combination of the fraud risk score, the underwriting risk score and the property valuation risk score.

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

receiving information about a loan; and

calculating a risk score for the loan based on a plurality of risk factors including at least two of a fraud risk factor, an underwriting risk factor and a property valuation risk factor.

44. The computer-implemented method of claim 43, wherein the step of calculating the 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 risk score for the loan is based on the fraud risk score, the underwriting risk score and the property valuation risk score.

45. The computer-implemented method of claim 44, 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.

46. The computer-implemented method of claim 45, 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.

47. The computer-implemented method of claim 45, further comprising the step of determining one or more steps needed to resolve the one or more detected variances.

48. The computer-implemented method of claim 45, further comprising the step of tracking the status of the one or more detected variances.

49. The computer-implemented method of claim 44, 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.

50. The computer-implemented method of claim 44, further comprising the step of converting at least one of the fraud risk score, the underwriting risk score and the property valuation risk score.

51. The computer-implemented method of claim 50, wherein the step of converting comprises weighting at least one of the fraud risk score, the underwriting risk score and the property valuation risk score based on the level of risk associated therewith such that the risk score is based on the weights assigned thereto.

52. The computer-implemented method of claim 50, wherein the step of converting comprises converting at least one of the fraud risk score, the underwriting risk score and the property valuation risk score such that all of the scores are compatible, and averaging the compatible scores.

53. The computer-implemented method of claim 43, further comprising the step of assigning a risk category to the loan based on the risk score.

54. The computer-implemented method of claim 43, 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 risk score comprises calculating a risk score for the claim based on a plurality of factors including at least one of a fraud risk factor, an underwriting risk factor, and a property valuation risk factor, whereby the risk score can be used by a loan service provider in deciding whether to allow or deny the claim.

55. The computer-implemented method of claim 44, further comprising the step of interfacing at least one pricing scheme of a loan service provider such that a loan or insurance policy can be automatically priced based on the risk score calculated therefor.

56. The computer-implemented method of claim 44, wherein the risk score is based on a combination of the fraud risk score, the underwriting risk score, and the property valuation risk score.