Mavent Announces M&A Due Diligence Service.

Fast, economical, comprehensive loan quality analysis for investors acquiring mortgage originators

IRVINE, Calif. -- Mavent Inc., a provider of automated regulatory compliance solutions to the mortgage industry, announced today a new practice group that provides regulatory due diligence

Mavent's Mergers and Acquisitions (M&A) Due Diligence Practice conducts an automated review of an entire pool, or of a statistically relevant sample of loans, for compliance with the following applicable laws:

* Truth In Lending

* HEOPA, state and local high cost

* Broker and lender licensing verification and applicability to the subject loan

* State consumer credit laws (more than 300 statutes and regulations)

* OFAC/SSN# validation

* Fannie Mae requirements

Mavent can provide its analysis under various regulatory frameworks, including: (1) as a state licensed lender according to those specific licenses the originating lender possessed, and (2) as a federal depository institution (or as an operating subsidiary) exporting from the originator's home state.

This dual analysis enables investors to analyze loans based on the licensing or charter authority of the lender, whatever it might be. It also enables federally chartered banks that are considering acquiring licensed lenders to assess the risk exposure of existing loan pools, as well as understand how their ability to preempt certain state laws would change the target's regulatory risk schema for any new loans it originates.

"Acquirers of mortgage institutions, portfolios and loan pools are in many cases liable for regulatory violations committed by the selling entity," said Louis Pizante, CEO of Mavent. "Non-compliance can result in regulatory fines and penalties, civil class actions, and reputational and operational problems, all of which can result in significant financial cost."

As part of the service, Mavent assists the originator in preparing a batch file extracted from its system of record that includes the customary data required to perform the compliance reviews (e.g., data that is found on the 1003, note and HUD-1 and secondary market due diligence).

Clients receive a comprehensive summary assessment report quantifying various regulatory exposures of the pool, detailed analysis of each individual loan, and a Web-based reporting tool that allows the client to easily run reports on various filter criteria, e.g., lien position, property state and exception type.

"Compliance risk differs from other business or market risks facing mortgage institutions. It's rooted in laws designed to ensure social equity, making a purely economic approach to its diversification or tolerance unacceptable," said Pizante. "Those responsible for their institution's reputation need to make certain they do not assume the liabilities of a counterparty to a strategic transaction."

Mavent, which specializes in mortgage regulatory compliance, is widely regarded as a leader in this field. Because the reviews are automated, Mavent is able to provide its service at a fraction of the time and cost of a traditional due diligence firm. Mavent's expertise, speed and cost provide its clients a solid advantage in bidding on distressed companies or their loan portfolios. Several existing Mavent clients have utilized the due diligence service upon purchase of a mortgage originator.

About Mavent Inc.

Mavent Inc. is a leading provider of automated compliance solutions for the mortgage industry. Incorporated in 2000, Mavent is the developer of the Mavent Expert System and the Mavent Compliance Console (MC2). The Mavent Expert System is a comprehensive automated solution that submits loan data for reviews against nearly 300 legislative acts, 200 license types, and the rules and regulations of over 60 regulatory authorities. Mavent's review functions include aspects of the Truth In Lending Act; HOEPA, state and local high cost reviews; loan level lender and broker license reviews; state consumer credit laws relating to such terms as usury, fee restrictions and prohibitions, prepayment penalties, late fees, and loan term and payment limitations; certain requirements of the Home Mortgage Disclosure Act; the Office of Foreign Asset Control; and, investor program requirements, such as an accurate Fannie Mae points and fees threshold test. Mavent can also implement custom business rules for its clients. The Mavent Expert System is supported by a growing network of law firms (including such prominent firms as Hudson Cook) who approve each of the nearly 7,000 pages of rules documentation that supports the Mavent Expert System.

The Mavent Expert System has conducted more than 20 million compliance reviews to date for some of the industry's largest originators and purchasers, including Fannie Mae, Citimortgage, National City Mortgage Corp., AmTrust Bank, First Franklin, Ocwen Financial Corp., Credit Suisse, GreenPoint Mortgage and HomeLoanCenter (a division of LendingTree). For more information on Mavent, visit the company Web site at www.mavent.com.