GE Capital Mortgage Insurance Co., like most other mortgage insurers, is marketing a mortgage scoring system to lenders. But GE, the nation's second-largest mortgage insurer, is developing this product even further, in the hopes that lenders will be able to use it beyond the initial underwriting of a loan.

Risk Engine will address all aspects of the mortgage banking process- originations, secondary marketing, and servicing.

And the lead developer of Omniscore, GE's origination software, William Makuch, will oversee the rolling out of Risk Engine. Mr. Makuch has been promoted to senior vice president of risk management at the Raleigh, N.C.- based company.

The first version of Omniscore was not marketed to lenders; a second version was available for nonconforming loans. The latest version, for all types of loans, will be a part of Risk Engine.

Mr. Makuch said GE had not been selling Omniscore before Risk Engine becausem it wanted to do more than introduce yet another mortgage scoring model to the market.

"Lenders have preferred underwriting systems already," he said. Some mortgage banks, especially industry giants like Norwest Mortgage and Countrywide Credit Industries, have developed their own systems. And the automated underwriting systems of Fannie Mae and Freddie Mac have been gaining favor with lenders as well.

Julee Ashburn, the project manager for Risk Engine, said lenders will be able to choose the part of Risk Engine that they need. "This gives lenders the opportunity to use Risk Engine in conjunction with what they've already got."

One lender is testing portions of the origination part of Risk Engine. Lenders will receive the latest version of Omniscore in a few weeks. The fraud evaluation model will come next, and Ms. Ashburn said most of the remaining pieces of Risk Engine will be available by yearend.

The secondary marketing portion of Risk Engine will feature hedging and pricing models for portfolios. The servicing component will include default management models and prepayment speed predictors.

Ms. Ashburn said Risk Engine will eventually provide access to Freddie Mac's Loan Prospector and Fannie Mae's Desktop Underwriter. In addition, the system will give lenders access to insurance offerings of GE's competitors.

But Dr. Makuch added that GE hopes to use Risk Engine to create customized mortgage insurance products for lenders depending on the types of loans they enter into the system.

"We feel very comfortable not only making tools available, but making different insurance products available," he said.

Subscribe Now

Access to authoritative analysis and perspective and our data-driven report series.

14-Day Free Trial

No credit card required. Complete access to articles, breaking news and industry data.