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ComplianceEase® Offers First Anti-Predatory Lending Compliance System to Automate New Investment Rating Agency Guidelines
- A real-time solution to satisfy rating agencies' loan classification requirements -

San Francisco, Calif. - (BUSINESS WIRE) - June 15, 2004 - ComplianceEase® announced today at the RMBS 2004 Annual Strategy Meeting in San Francisco that its product - PredatorAnalyzer™ (PA™), the industry-standard automated compliance system, now allows mortgage originators and residential mortgage-backed securities (RMBS) issuers to instantly obtain the anti-predatory lending loan categorization required by Standard & Poor's (S&P).

The new functionality is a timely enhancement due to new S&P policies announced in a May 13th alert. Effective July 1st, loans subject to certain anti-predatory lending legislation and sold into rated securities must be categorized and identified as "Home Loans", "Covered Loans", or "High Cost Loans" in the loan-level information submitted to LEVELS® - the S&P risk analysis system. ComplianceEase has responded to the new S&P policies by enhancing its PA system to automatically categorize loans according to S&P requirements.

Scott Mason, director at Standard & Poor's, noted, "We are pleased to see the implementation of Standard & Poor's guidelines within automated compliance systems like PA. It makes sense to use available technology to help streamline the process of preparing pool submissions." Since 2000, the PA system has provided the mortgage industry's most robust automated regulatory compliance system, identifying all anti-predatory loan classifications, while simultaneously flagging any violations. The proliferation of anti-predatory lending laws to numerous state and municipal jurisdictions, stiff penalties for non-compliance, and the potential implication of mortgage assignees have made the PA system an indispensable part of mortgage origination and acquisition.

John Vong, chief executive officer of ComplianceEase, explained the addition of rating agency guidelines, "The PA system is built on a highly configurable artificial intelligence-based rule engine. It enables us to build new rating agency guidelines into the system quickly and accurately. The incorporation of these new guidelines is a natural and straightforward next step to further enhance our industry-standard compliance risk assessment tool, as we have previously done with other secondary market anti-predatory lending requirements, such as those issued by Fannie Mae and Freddie Mac." Jason Roth, ComplianceEase vice president, explained, "Starting with the new policies announced by S&P last month, we have augmented the functionality of PA to enable lenders and RMBS issuers to have an overall picture of the required classifications of their pools before delivery to Wall Street. Furthermore, the system flags loans that must be excluded from S&P rated structured finance transactions, as well as those loans that require additional credit enhancement."

ComplianceEase continues to work closely with other rating agencies such as Dominion Bond Rating Service (DBRS), whose soon-to-be-released anti-predatory lending requirements will also be incorporated into the PA system. Michael Nelson, senior vice president of DBRS, noted, "ComplianceEase's analysis provides an ideal tool for issuers to automate and standardize their risk review processes. It will work seamlessly alongside our own rating system." The quantity of "high-cost" anti-predatory legislation at state and municipal levels has increased steadily since 2000 (Graph). Mr. Roth added, "With a growing list of anti-predatory lending legislation, the rating agencies will continue to refine their policies to address the additional risk. The resulting requirements will very likely make their way down the mortgage food chain to the point of origination. The use of automated solutions like PA to manage compliance risk is no longer strictly an issue of convenience. It's quickly becoming a necessity."

About ComplianceEase®
ComplianceEase, a division of LogicEase Solutions Inc., headquartered in San Francisco, California, is a premier provider of intelligent business solutions to the financial services industry. Its ComplianceEase platform provides the industry's first automated compliance solutions utilizing advanced artificial intelligence reasoning and decisioning technologies as well as natural language processing. ComplianceEase powers beginning-to-end solutions at a fraction of the time and cost of the traditional approaches, while providing better accuracy and integrity. ComplianceEase also provides professional services, and consulting services. For more information on ComplianceEase, visit www.ComplianceEase.com.

LEVELS® is a registered trademark of Standard & Poor's, a Division of The McGraw-Hill Companies, Inc. ComplianceEase® is a registered trademark; PredatorAnalyzer and PA are trademarks of ComplianceEase, a Division of LogicEase Solutions Inc.

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