VeroSELECT 2.0 Links Investors and Third-Party AVM Specialist for Cascade Management

May 14, 2007

Veros technology is making it easy for mortgage lenders and investors to capitalize on experience of skilled consultants

Santa Ana, CA - May 14, 2007 - Veros Real Estate Solutions, the industry leader in predictive technology, announced today that, in addition to its VeroVALUE AVM,, the company's VeroSELECT 2.0 collateral valuation and risk management platform has been chosen by Luminent Mortgage Capital, Inc., Philadelphia, Penn., to provide valuation management and validation for the collateral underlying the whole loans the REIT buys in the secondary market. AVMetrics, Simi Valley, Calif., has been retained to consult for Luminent and will serve as a third-party administrator for the VeroSELECT platform.

In October 2006, Veros upgraded its popular VeroSELECT technology, evolving it from a useful tool for creating cascades of Automated Valuation Models (AVMs) into a sophisticated collateral risk management platform. Luminent will now leverage that platform to perform automated valuation due diligence on 100% of the loans it buys for securitization. Since the REIT maintains the first loss position in its capital markets transactions, validating the value for each property is a high priority.

"We've been buying whole loans since the third quarter of 2005," said Ellie Cornfeld Melton, Senior Vice President and Chief Credit Officer for Luminent. "What we saw with those early trades was a trend toward issues with respect to valuation of the property. So we've migrated our due diligence strategy to require some sort of valuation review on 100% of the loans we buy."

Cornfeld Melton said the REIT had hoped to avoid any possible vendor bias by developing its own preference table for the use of AVMs, but lacked the internal resources to create the cascade internally. The firm turned to the industry AVM experts at AVMetrics,LLC.

"We test 150,000 to 200,000 purchase properties every quarter, so we have an extensive database demonstrating how the different AVMs perform in different geographic markets, price tiers and property types," said Lee Kennedy, founder and Managing Director of AVMetrics. "We've turned that into an AVM cascade specific to Luminent's risk concerns and those are the tables we are going to administer for Luminent on the Veros platform."

"This was one of our objectives in the design of VeroSELECT. Many mid-tier and smaller institutions have the need for what VeroSELECT delivers but lack the internal resources to fully implement and manage their own collateral valuation platforms," said Darius Bozorgi, CEO of Veros Software. "We've made it extremely easy for lenders to benefit from the experience available from independent, third party consultants. At the same time, we've provided a tool for these consultants to manage and validate the delivery of fully compliant valuation methodologies - all while providing the audit trails, reporting capabilities and transparency demanded by investors, lenders and regulators."

According to Kennedy, former vice president and alternative valuation products manager at Washington Mutual and who currently trains federal regulators on how to examine financial institutions and their approach to collateral valuation, "the regulatory agencies are very concerned with the risk of value shopping. The cascading systems not only have to be transparent but they also must have good underlying reasoning and empirical proof for how they are set up. So, back testing is vitally important and one of the many things we like about VeroSELECT is that the audit reporting is structured such that you can build reports on the fly and find out if the expectation of performance from the testing environment is being met in a production environment."

"We selected Veros for a number of reasons," said Cornfeld Melton. "Chief among them was the fact that philosophically, the company is run in a manner that is closely aligned to the way we run ours. We expect to capitalize on the flexibility and scalability built into VeroSELECT and eventually expand the rule set beyond just looking at the property."

VeroSELECT gained quick acceptance in the industry by making it possible for lenders to set up collateral valuation rule sets and build cascades for AVMs based on a wide variety of criteria, including LTV, credit, product type, geographic area (county, city, ZIP code, etc.), confidence scores, fraud or risk scores and/or any number of user-defined variables, such as internal risk or collateral scores. In addition, different rule sets can be built and simultaneously applied to different business channels or product types.

VeroSELECT 2.0 gives lenders absolute control of risk strategies with secure management of vendors, users and their own proprietary business processes. The intelligent, automated risk management platform provides access and automated routing along with automated selection and acceptance criteria for a full range of collateral risk solutions, including property information, AVM products, BPO services, appraisal solutions, varying photo and condition reports, collateral fraud tools, prequalification solutions and hybrid products and services. VeroSELECT is a fully automated enterprise system that can be installed and running in a single day, if the lender has its collateral policy in hand.

Luminent Mortgage Capital was formed in April 2003, and its common stock trades on the New York Stock Exchange under the ticker "LUM." Luminent's Residential Mortgage Credit strategy invests in mortgage loans originated in cooperation with selected high-quality providers within certain established criteria, as well as subordinated mortgage-backed securities that have credit ratings below AAA. Luminent's Spread strategy invests primarily in US agency and other highly- rated single-family, adjustable-rate and hybrid adjustable-rate mortgage- backed securities and leverages these investments through repurchase agreements and commercial paper. Luminent's website can be found at www.luminentcapital.com.

AVMetrics, LLC, headquartered in Simi Valley, CA, provides clients with the technical and subject matter support necessary to effectively use alternative valuation products, specifically, automated valuation models. AVMetrics' testing and auditing products, combined with experienced consulting and demonstrated domain expertise, helps mortgage-related businesses navigate the intricacies encountered in the selection and implementation of commercially available products for collateral risk assessment, evaluation and fraud analysis. For more information, visit www.avmetrics.net.

About Veros Real Estate Solutions:

Veros Real Estate Solutions, a proven leader in enterprise risk management and collateral valuation services, uniquely combines the power of predictive technology, data analytics and industry expertise to deliver advanced automated decisioning solutions. Veros products and services are optimizing millions of profitable decisions throughout the mortgage industry, from loan origination through servicing and securitization. Veros provides solutions to control risk and increase profits including automated valuations, fraud and risk detection, portfolio analysis, forecasting, and next-generation collateral risk management platforms. Veros is headquartered in Santa Ana, California. To order the VeroFORECAST update or receive information on other Veros analytic products and systems, visit www.veros.com or call (866) 458-3767.