In the wake of the robo-signing scandal and recent court cases challenging mortgage paperwork, a new service being launched at the American Securitization Forum gathering in Orlando claims it can fix most errors in the mortgage title chain. DKR Collateral Dynamics is a new venture being co-partnered by Jon Daurio, CEO of Kondaur Capital, perhaps the largest dealer in nonperforming mortgages in the country. DKR offers collateral audit reviews, by going through mortgage and title paperwork, identifying any errors and working to patch the problems. “We can cure the loan documentation more than 98% of the time,” Daurio said. The paper work receives a “Collateral Dyna Rating” on a scale of A to F. Similar to a credit rating agency review, where risk of default is measured, the CDR measures the risk of the title ownership deteriorating for a mortgage servicer once foreclosure proceedings begin. Daurio said the actual process is no different that the due diligence Kondaur completes on mortgages it is looking to buy. As proof of his system’s effectiveness, Daurio said that eight out of 10 times, he can take the title on the loans he buys. In the other 2% of cases, the documentation is rated as a “FF” which stands for “fatal flaw.” This happens when DKR reviews the paperwork and finds “there is a real problem with the (foreclosure) affidavit,” Daurio said. In other words, “if a judge calls you to the mat, you’ll be dead in the water,” he added. Any results of DKR is discoverable in court, Daurio admits, but this can work to the servicer’s advantage. On the downside, if a distressed mortgage borrower finds out his Dyna Rating is FF, he may be incentivized to aggressively pursue the servicer in court. But Daurio said what is more likely, is that plaintiff’s attorneys will see that in most cases with a Dyna Rating, the loan is in the process of being cured and will move on to a less challenging court case. Write to Jacob Gaffney. Follow him on Twitter @JacobGaffney.