Computer Power Inc. and Guaranty Asset Protection Services have finalized a letter of intent to enhance CPI's communication network.

Based in Jacksonville, Fla., Computer Power develops software and systems for the mortgage industry. It is a division of Systematics Information Services Inc., Little Rock, Ark.

The CPI Interchange is a communications network that enables brokers, bankers, and vendors to transmit data among themselves more efficiently. It will be fully operable in the first quarter.

Guaranty Asset Protection Services, or GAPS, is a fraud investigation service staffed by a team of mortgage banking and law enforcement professionals. It is wholly owned by the Guaranty Bank of Milwaukee.

Veteran Police Officer

The president of the company, Dick Ward, was with the Los Angeles Police Department for over 21 years. GAPS is headquartered in West Hills, Calif. It serves originators, insurers, and investors by electronically comparing data on residential loan applications with its own data base.

"Mortgage fraud has increased dramatically in recent years," said Rob Lee, a vice president at CPI. "By offering our members GAPS, we strengthen our servicee and give banks more of a reason to use the CPI Interchange."

Patterns of Fraud Detected

Under the terms of the agreement with CPI, users of the service will be able to route their mortgage applications to GAPS via the CPI Interchange.

The GAPS data base contains information on incorrect Social Security numbers and names of known mortgage-fraud offenders. What's more, the GAPS data base uses proprietary algorithms to find patterns that indicate possible fraud.

"It identifies factors such as loan product, geographical location, and loan amount and references them against different models and patterns GAPS has identified as possible problems," said Mr Lee. "Their service goes far beyond |This individual once committed a crime. Don't make him a loan.'"

If an application contains information that fits a pattern, the Interchange will alert the lender without disclosing the nature of the match. Once the prefunding review is complete, GAPS professionals will provide further investigative services.

They are also available to testify at court proceedings on behalf of their clients.

Ms. Sullivan is a freelance writer based in New York.

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