Thanks to the subprime lending crash and the issues of default risk in lending, some companies are looking at ways to determine default risk in mortgage loans. One company, BasePoint, has done just that. For between $6 and $10 per application (a cost passed onto the borrower, of course), mortgage lenders can investigate default risk. Inman News reports on this new default risk scoring system:

Lenders can use BasePoint EPD alert to score all new applications, and then subject 10 to 15 percent of those loans for further targeted reviews, the company said.

In a test in which EPD alert was used to score past loans and 10 percent were targeted for further review, the software would have reduced by half the dollar volume of loans that later experienced early payment defaults (EPDs), the company said.