April 15, 2009 (Minneapolis, Minnesota, USA) — FICO (NYSE: FIC), the leading provider of analytics, decision management technology and consumer credit empowerment, today introduced the FICOÒ Mortgage Recovery Initiative (FICOÒ MRI) to help homeowners and lenders address the growing problem of mortgage foreclosures. Based on FICO’s extensive knowledge of consumer credit behavior, FICOÒ MRI was developed in collaboration with leading mortgage industry partners to help lenders address immediate challenges with mortgage modifications while mitigating new delinquencies that are near on the horizon.
According to U.S. Treasury Department estimates, four million U.S. homeowners are at risk of foreclosure today, and another seven million are seriously delinquent on their mortgage payments.
“What’s needed is a comprehensive solution to the problem,” said Dr. Mark Greene, chief executive officer of FICO. “Homeowners need easy and efficient ways to weigh their options and process their loan modifications rapidly, while lenders and servicers need ways to reduce the number of re-defaults and prevent future foreclosures. Now that the US government has established guidelines for mortgage remediation, we’re able to provide comprehensive solutions that address everyone’s concerns, leveraging the broad expertise of our partners and FICO’s deep understanding of consumers’ financial health and credit worthiness.”
FICOÒ MRI is the first solution to holistically address the US mortgage loan crisis. It combines the capabilities of FICO, the Homeownership Preservation Foundation (a national non-profit organization providing a network of HUD certified counseling agencies), Money Management International (the nation’s largest full-service credit counseling agency), and Equifax (a global leader in information solutions, offering the new FICO Mortgage Industry Score).
The solution complies with the federal Making Home Affordable (MHA) program under President Obama’s Homeowner Affordability and Stability Plan (HASP) and contains the following components for expediting loan modifications and for mitigating future foreclosures:
- Mortgage Relief Online. A new consumer web site (www.mortgagereliefonline.com), available April 17th, that provides an efficient, trustworthy approach to loan workouts, processing confidential consumer applications for government-funded loan remediation programs at no cost to the consumer. The website leverages the high-volume myFICO.com platform that already serves millions of consumers.
- Mortgage Counseling. In keeping with FICO’s emphasis on consumer empowerment, confidential credit counseling is provided to eligible consumers by FICO certified counselors, via a partnership with Money Management International (MMI), a HUD certified counseling agency.
- Mortgage Risk Analyzer. Based on the recently launched FICOÒ Mortgage Industry Score, Mortgage Risk Analyzer identifies mortgage loan holders who are likely to default or need assistance before they become delinquent. Integration with the Mortgage Relief Online website provides an efficient mechanism for managing large volumes of loan remediation requests.
- Mortgage Response Analyzer: Advanced analytics help servicers design highly effective outreach campaigns to attain the highest borrower response and conversion rates, for maximum remediation success.
- Mortgage Portfolio Optimization: Using sophisticated business rules, Mortgage Portfolio Optimization helps lenders present the most appropriate loan product offers to at-risk customers while preserving loan portfolio value. Delivered on proven FICO platforms, Mortgage Portfolio Optimization provides work flow infrastructure and analytic logic that result in better management of portfolio risk, and ultimately, a better return on investment.
“As HPF continues to expand and operate the Homeowner’s HOPE™ Hotline (888 995 HOPE), we’re pleased to support FICOÒ MRI to assist homeowners in avoiding foreclosure,” said Colleen Hernandez, president and executive director of Homeownership Preservation Foundation (HPF). “We firmly believe that innovative solutions like FICOÒ MRI, which results from our shared interest in helping consumers, and from partnerships among policy makers and the mortgage lending industry, are the most effective ways to preserve and expand homeownership.”
“Consumers are facing challenges both deciding what to do and determining whom to trust,” said Steve Bucci, president of the MMI Financial Education Foundation, on behalf of MMI. “We are excited about the opportunity to make our experience as one of the nation’s largest housing counseling agencies available to FICOÒ MRI by providing confidential counseling to consumers who need it.”
“The complexities of the current mortgage situation present tremendous challenges for consumers, loan servicers and the secondary market,” said Craig Focardi, Senior Research Director for TowerGroup. “What is needed is a holistic view of credit health, combined with intelligent analytics that ultimately result in better informed consumers and a financially sound business model for lenders and investors. Comprehensive services that integrate all parties to the loan modification transaction more closely link credit education components with lending decision management solutions to derive the most optimal overall outcome.”
FICO (NYSE:FIC; www.FICO.com) is the leader in decision management, transforming business by making every decision count. FICO combines trusted advice, world-class analytics, and innovative applications to help businesses automate, improve, and connect decisions over customer lifecycles and across the enterprise. Clients in 80 countries work with FICO to increase customer loyalty and profitability, reduce fraud losses, manage credit risk, meet regulatory and competitive demands, and rapidly build market share. FICO also helps millions of individuals manage their credit health through its consumer website, www.myFICO.com.
Statement Concerning Forward-Looking Information
Except for historical information contained herein, the statements contained in this news release that relate to FICO or its business are forward-looking statements within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995. These forward-looking statements are subject to risks and uncertainties that may cause actual results to differ materially, including the success of the Company’s Decision Management strategy and reengineering plan, the maintenance of its existing relationships and ability to create new relationships with customers and key alliance partners, its ability to continue to develop new and enhanced products and services, its ability to recruit and retain key technical and managerial personnel, competition, regulatory changes applicable to the use of consumer credit and other data, the failure to realize the anticipated benefits of any acquisitions, continuing material adverse developments in global economic conditions, and other risks described from time to time in FICO’s SEC reports, including its Annual Report on Form 10-K for the year ended September 30, 2008, and its last quarterly report on Form 10-Q for the period ended December 31, 2008. If any of these risks or uncertainties materializes, FICO’s results could differ materially from its expectations. FICO disclaims any intent or obligation to update these forward-looking statements.
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