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 WALNUT CREEK, Calif., Oct. 24 /PRNewswire/ -- Foster Ousley Conley, Mortgage Guaranty Insurance Corporation, (MGIC), and HNC, Inc., have formed a strategic alliance to integrate MGIC's predictive loan performance technology into the Automated, Quality Control Artificial Intelligence Underwriting System (AQUARIUS), scheduled for introduction nationwide in the first quarter of 1994.
 AQUARIUS was conceived earlier this year by Foster Ousley Conley and HNC, Inc., as a means to translate powerful artificial intelligence development software into a practical, cost-efficient automated underwriting product for the mortgage finance industry.
 Under a three-way agreement involving MGIC, Foster Ousley Conley and HNC, Inc., MGIC is contributing a series of mortgage performance models that will enable users to predict how well individual loans are likely to perform over time, thus adding an important new dimension to the AQUARIUS underwriting system.
 MGIC will also serve as the primary distribution partner through which the AQUARIUS system will be introduced nationally. In addition to its automated underwriting function, AQUARIUS users will have access to a range of quality control services and technologies, which Foster Ousley Conley will offer through an on-line link to a telecommunications gateway.
 Throughout the early 1990s, most applications of artificial intelligence in the mortgage industry, including AQUARIUS, have been aimed at electronically replicating the decision patterns of a lending organization's best underwriters.
 Since the beginning of 1993, MGIC has adopted a different but complementary approach to artificial intelligence underwriting, involving analysis of actual historical delinquency data. As a result of the strategic alliance with MGIC, AQUARIUS will have the capability to not only replicate an expert underwriter's decision patterns, but can also help predict actual loan performance.
 "Over the last several months, AQUARIUS has made tremendous strides in its ability to tell our users whether a qualified underwriter would approve or reject a mortgage loan. Now, with MGIC's contribution, AQUARIUS will also be able to predict whether or not that loan is likely to be a well performing asset," Michael Foster, chairman and chief executive of Foster Ousley Conley, said. "By merging these complementary capabilities within a single decision system, we intend to make AQUARIUS the most advanced artificial intelligence alternative in the mortgage industry."
 MGIC is well-equipped to provide accurate mortgage risk prediction models, based on its performance and expertise in managing mortgage default risk, the size and geographic dispersion of its loan data, and the skills its risk management staff has developed in wielding HNC's artificial intelligence development software.
 "MGIC has a tremendous advantage not only in the number and diversity of loans it can access, but also in the amount of data recorded on each loan. This is a rare and valuable resource," Michael Thiemann, HNC, Inc., executive vice president of Sales and Marketing, said. "In addition, MGIC is a very capable student of HNC's artificial intelligence methodologies. They are the first company I know of that has been able to produce a comprehensive mortgage performance model using the full power of our advanced neural network technology."
 "The more we learn about AQUARIUS, the more enthusiastic we become about its potential as an easy-to-use artificial intelligence solution for our customers," MGIC's Curt Culver, executive vice president- Marketing, said. "By introducing AQUARIUS to the marketplace, we hope to provide a significant new service to the many lenders who are eager to take advantage of the new automated underwriting efficiencies."
 To educate lenders about the AQUARIUS underwriting system, MGIC, Foster Ousley Conley and HNC are planning a series of regional seminars in 1994, aimed at mortgage lending executives who are exploring artificial intelligence opportunities for their companies. A key benefit of the system, which will be explained at the seminars, is the amount of flexibility that has been built into AQUARIUS, enabling the system to be adapted for each installation in order to meet individual lender needs and market conditions.
 Says HNC's Michael Thiemann: "Based on the progress we've made in California, and the national dimension which MGIC brings to the equation, we are now confident that AQUARIUS will become an extremely powerful catalyst for artificial intelligence applications in the mortgage industry."
 Foster Ousley Conley is the nation's largest developer of mortgage quality services and technology. The company provides a host of products, including flood certification, electronic fraud detection, appraiser and broker qualifications databases, and artificial intelligence decision systems to the mortgage industry.
 HNC, Inc., a world leader in neural network technology, has successfully provided neural network-based solutions to a wide variety of customers, including several Fortune 500 companies. Using technology combining neural networks and statistical modeling techniques, HNC provides advanced products, consulting, implementation and training to the banking, finance, mortgage and retail industries.
 MGIC is a leading provider of private mortgage insurance coverage in the United States. Private mortgage insurance covers residential first mortgage loans and expands homeownership opportunities by enabling people to purchase homes with less than 20 percent down payments. Private mortgage insurance also facilitates the sale of low down payment first mortgage loans in the secondary mortgage markets.
 -0- 10/24/93
 /CONTACT: Pam Rinehart of Foster Ousley Conley, 510-933-8000; or Nick van der Schalie, of HNC, Inc., 619-546-8877; or Patricia Neale of MGIC, 414-347-2681/

CO: MGIC; Foster Ousley Conely; HNC, Inc. ST: California IN: CPR SU:

CP-DS -- MN001 -- 6046 10/24/93 15:01 EDT
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Publication:PR Newswire
Date:Oct 24, 1993

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