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First American Financial's Unit Unveils FraudGuard Module

First American Financial Corporation’s FAF unit First American Mortgage Solutions, LLC, came up with a monitoring solution, Mortgage Forbearance Indicator (MFI), a module which is available through FraudGuard.

FraudGuard is an electronic loan-level fraud detection solution for lenders and investors that helps manage processes for mortgage transactions. It’s a risk management solution that assists businesses of all sizes with identity validation, exposure and income analysis and more.

Optional modules can be added to customize FraudGuard to better suit the institution’s preferences for application reviews. The Mortgage Forbearance Indicator is a new FraudGuard module, which monitors from application to closing, a consumer's credit to identify mortgage forbearance, and alerts the processor and/or underwriter when new activity is found in one easy-to-read report.

The majority of First American business is dependent on activity in the real estate and mortgage markets, which are cyclical and seasonal. Increased mortgage financing availability has a positive effect on residential real estate activity, which typically increases the company’s revenues. In the current market environment, the company remains focused on growing core title insurance and settlement services business, reinforcing enterprise through data and process advantages that support core title and settlement services business. Growth in real estate transactions and mortgage origination activity leads to higher demand for the company’s title information products, which in turn increases information and other revenues.

In most cases, mortgage lenders desire to be protected from loss or damage in the event of defects in the title of the subject property. Lenders rely on First American for solutions to originate, close and service quality loans. While verifying a forbearance activity of a borrower is expensive and time consuming for lenders, FraudGuard MFI detects the hidden forbearance requests in no time, curtaisl underwriting timelines and assists lenders in avoiding potential agency fees or unsaleable loans.

Leveraging public, private and proprietary data sources, the FraudGuard platform helps lenders identify potential fraud risk and errors in mortgage applications, comply with regulations, improve the application review process through greater speed and efficiency, and increase loan quality.

In a bid to enhance the mortgage market and aid lenders and borrowers, First American has undertaken various initiatives. It partnered with LendingQB to enable complete end-to-end digital mortgage closing solution for lenders, borrowers and settlement agents. It aided lenders, borrowers and settlement agents with a complete digital solution to streamline the closing process with safety and security.

First American entered into a strategic alliance with Clarifire for seamless and effortless accessibility to its loss mitigation products and services.

Also, First American teamed up with Home Point Financial to provide borrowers an efficient and beneficial mortgage process.

Shares of this Zacks Rank #2 (Buy) company have lost 13.9% in the past year, compared with the industry’s decline of 3.8%. Nevertheless, strong fundamentals such as growing direct premiums, escrow fees and agent premiums as well as effective capital deployment should help shares bounce back.

 

Other Stocks to Consider

Investors interested in property and casualty industry may also look at Donegal Group Incorporation DGICA, Fidelity National Financial Inc., FNF and Markel Corporation MKL, each carrying a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Donegal surpassed estimates in each of the last four quarters, the average being 86.44%.

Fidelity National surpassed estimates in each of the last four quarters, the average being 32.13%.

Markel surpassed estimates in three of the last four quarters, the average being 50.01%.

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