A mortgage insurance company is offering a product that predicts the likelihood of loan foreclosures and is billing it as the next generation of credit-scoring technology.

Mortgage Guaranty Insurance Corp.'s offering combines conventional credit ratings with personal, demographic, and loan information to score the probability that a loan will fail.

The Milwaukee insurer has so far signed up four lenders, which it declined to name, to evaluate the product. MGIC is talking to another 20 companies about trial runs, executives said.

Mortgage banks that sign on will pay MGIC $15,000 as a licensing fee.

Aside from lenders, MGIC is talking to credit agencies about accepting the scores as a way of reducing the amount of credit enhancement needed for pools of mortgages. Fitch Investors Service last week became the first to authorize the product for this use, MGIC executives said.

The insurer said its product stands above the credit and mortgage scoring models that already fill the market. MGIC uses a broad swath of information and can send data directly to lenders for their analytical use in-house, instead of requiring that they send their customer information off-site to be scored, executives said.

"This provides the best flexibility," said Stephen Blose, vice president for strategic technology. "It's very simple to use; even a laptop" can accommodate the system.

MGIC said it scored more than 560,000 mortgages to compare its results with those of other credit scoring systems. Two lists were developed, and executives said the MGIC list scored more accurately for foreclosures and the likelihood of foreclosure.

Based on the analysis, "we feel our score has a better ability to quantify mortgage risk than the credit score alone," Mr. Blose said.

The new model is a step forward in credit scoring, he said. Lenders have been using such systems for the past few years as a way to protect against making bad loans.

The MGIC system joins those offered by entities such as the Federal Home Loan Mortgage Corp. and by other insurers, including PMI Group.

But MGIC's system "moves away from strict rule-based analysis and singular credit scores and allows our knowledge gained through review of historical mortgage performance development to be applied at origination," Mr. Blose said.

"Anytime you can be smarter about the asset you're creating," the better the chance to see it successfully through lending and servicing, he said.

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