Digital Risk, a firm that provides mortgage, compliance and transaction management data products, released a new mortgage analytics platform called Veritas this week to dig deeper into loan files in search of default risk.

Data released by the firm suggests borrowers who are eager to pay revolving debt, such as credit card debt, after receiving a loan modification are more likely to re-default, Digital Risk said.

Veritas was designed specifically to address the fact that while FICO scores often dictate credit decisions, they are not a panacea for detecting all risk or future risk, especially when evaluating a mortgage for a loan modification.

Veritas uses specific borrower, property and real estate market information to assess multiple layers of risk, the firm said.

"The mortgage industry is relying on outdated methods to determine risk," said Peter Kassabov, Digital Risk’s chairman and chief executive. "During the mortgage crisis, high FICO borrowers encountering distress defaulted in huge numbers, yet we still depend heavily on that one score along with CLTV to make lending and loan modification decisions. Veritas has shown there are many more impactful variables that can predict future risk with much more accuracy, and provide the reason why that risk exists. Veritas brings data and analytic confidence to the entire market, including origination, default and servicing."

Digital Risk analyzed 5 million loans originated from 2006 through 2011 using Veritas as well as 100,000 loan modifications. The study proved that a static FICO score alone cannot accurately predict a borrower's overall default risk, especially when factors like revolving debt and other financial issues surface in the borrower's history.

"We must create new models for measuring risk that are more discriminating, holistic and dynamic or the industry will repeat the mistakes of the past," said Kassabov.