SHELTON, Conn., May 13, 2016 /PRNewswire/ -- Clayton
Holdings LLC, a leading provider of loan due diligence,
surveillance, REO management, consulting, valuation, title and
settlement services to the mortgage industry, announced today that
Morningstar Credit Ratings, LLC has ranked the company as both a
Residential Mortgage Backed Securities (RMBS) Deal Agent and as a
Residential Representation and Warranty Reviewer. In both
categories, Clayton was ranked MOR RV2 with a forecast of
"Stable."
This is the first time that any rating agency has ranked a
company in either category. The concept of a deal agent is
relatively new and is still evolving, but most observers expect
that it will include functions of servicer surveillance and
portfolio oversight in addition to the loan review responsibilities
of the representation and warranty reviewer contained in recent
private label securities. "The need for an independent third party
to protect investors' interests is viewed as vital to the
re-emergence of the private-label securitization market,"
Morningstar noted. "This view is shared by the U.S. Treasury
Department and the Structured Finance Industry Group (SFIG), two
entities that have supported and promulgated the development of the
deal agent concept via SFIG's RMBS 3.0 initiative."
Morningstar chose to issue two separate ratings; one for deal
agent and one for representation and warranty reviewer. The
role of representation and warranty reviewer is designed to provide
an independent third party review of certain loans based upon
trigger events defined within the transaction documents. Clayton
was most recently hired to perform this service for Angel Oak
Mortgage Trust 2015-1.
In assigning its rankings, Morningstar noted that, "Clayton is
uniquely positioned to fulfill the roles of a deal agent and a
representation and warranty reviewer. The full suite of mortgage
industry services offered by Clayton and its subsidiaries positions
the company well to fulfill the anticipated role of the deal agent
and representation and warranty reviewer as well as any customized
requirements that may be mandated by industry stakeholders."
The release observed that, "Clayton has reviewed more than 12
million loans consisting of many varied loan types, encompassing
conforming and non-conforming loans. Since 1997, the company's
surveillance and file review team has performed independent
evaluations of residential mortgage-backed securitizations,
asset-specific reviews, and servicer performance assessments and
maintains a database of 7.6 million mortgage loans for trending and
performance analysis. Since 2012, Clayton has performed more than
300,000 loan reviews for mortgage industry stakeholders, often
related to external regulator mandates as well as more than 200
mortgage servicing-related operational reviews."
The agency said its "assigned rankings reflect Morningstar's
assessment of Clayton's operational infrastructure and
client-driven performance results in its respective lines of
business. The 'Stable' forecast for both rankings reflects solid
vendor performance for Clayton's client base deriving from a
tenured management team, a highly flexible technology environment,
a pervasive enterprise-wide risk-management infrastructure, and a
focus on client-driven performance results."
Commenting on the rankings, Clayton's Jeff Tennyson said: "We are extremely pleased
with Morningstar's assessment of Clayton's core capabilities. Deal
monitoring, portfolio surveillance, servicer oversight and file
reviews are existing core competencies of Clayton. We are
excited to be recognized by Morningstar for the utility in these
newly evolved functions of deal agent and representation and
warranty reviewer and hope that Clayton's demonstrated preparedness
serves as a further catalyst to reinvigorate the private-label
securitization market."
About Clayton Holdings LLC
Clayton Holdings LLC, a
subsidiary of Radian Group Inc. (NYSE: RDN), provides risk-based
analytics, residential loan due diligence, consulting, surveillance
and staffing solutions. The company's subsidiaries include: Green
River Capital, customized REO asset management and single-family
rental services; Red Bell Real Estate, advanced AVMs, BPOs and
technology to acquire and track performance of loan portfolios and
NPLs; ValuAmerica, national title and appraisal management company
and vendor management technology provider; and Clayton Euro Risk,
global services. For more information, call 877.291.5301 or visit
www.clayton.com.
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SOURCE Clayton Holdings LLC