Fair, Isaac and Co. is setting its sights on the mortgage world with the hiring of Ken A. Palla.

The San Rafael, Calif., software company announced that Mr. Palla will be its mortgage industry initiative manager.

His responsibilities include identifying business opportunities, developing and carrying out ideas for originations, servicing, securitization, and consumer direct marketing. Mr. Palla will also help identify potential strategic partnerships and develop them.

"Until now, there hasn't been a specific initiative to go after the mortgage world," Mr. Palla said.

Before joining Fair Isaac in December, Mr. Palla was a vice president at North American Mortgage Co., where he helped steer the company into subprime lending and where he oversaw a reengineering of the loan origination process.

Mr. Palla also worked in the late 1970s at BankAmerica Corp., where he managed mortgage pass-through operations and helped develop the first adjustable-rate loans with the American Bankers Association.

Fair Isaac creates software that helps companies make better use of customer information.

An emphasis on credit scoring has meant that most of Fair Isaac's clients have been banks and credit bureaus, said Vincent L. Turzo, a senior analyst at Jefferies & Co. in Los Angeles. It is looking to the mortgage, insurance, and health-care industries for growth opportunities.

"Mortgage markets are enormous, so to the extent that you can make a small difference with respect to the credit-scoring process, it could provide a huge return," said Mr. Turzo.

The company is looking to go beyond the credit-scoring system it introduced in 1995 in response to Fannie Mae and Freddie Mac's requirement that lenders include such scores as part of an underwriting package, Mr. Palla said. It hopes to use its products and services for the higher- credit-quality market as well as in the subprime market, he added.

Fair Isaac, which already offers underwriting, or prescore models, is developing prepayment models that determine the life of loans with more precision than aggregate models, said Mr. Palla. It is also working on portfolio defense models to help loan buyers, sellers, and servicers estimate how long loans are likely to remain active, he added.

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