Clayton, Experian Announce Partnership; Will Focus on Streamlined Loan Mods

Clayton Holdings, Inc. said today that it had partnered with consumer credit giant Experian to provide analytics and outsourcing services to the mortgage and securitization industries, centered on enabling so-called ‘fast-tracking’ of loan modification efforts. The cooperation between the two firms will leverage Experian’s data assets and predictive analytics, currently relied upon in the primary markets, to assess and mitigate risk in the secondary market. Many servicers face staffing shortages in loss mitigation as they attempt to implement and execute the voluntary “rate-freeze” program finalized by the ASF late last year, which recommends that troubled borrowers be segmented into three distinct groups. Earlier in the week, Federal Reserve governer Randall Krozner cited “capacity constraints” at servicers as a major bottleneck in efforts to fast-track loan modifications, and said servicers needed to do more. “The Paulson/ASF program sets a high hurdle for large subprime servicers,” said Clayton CEO Frank Filipps. “Our new alliance integrates the data intelligence and analytic capabilities of Experian with the loss mitigation skills and outsourcing resources developed in Clayton’s Surveillance, Special Servicing and Consulting businesses.” The new offering will identify rate-freeze candidates, and, if requested, provide turnkey fulfillment services to contact borrowers and secure their agreement for any steamlined loan modification effort. For those borrowers that are able to refinance, servicers can choose to outsource both the counseling and processing of refinance opportunities for borrowers eligible for FHA and other refinance programs, Clayton said. Clayton operates its own special servicing sub, Quantum Servicing Corp., which was added to Standard & Poor’s select servicer list last April. According to S&P’s ratings report, Quantum’s portfolio totalled 3,477 loans worth $667 million in UPB at the end of the second quarter of last year. The Clayton/Experian partnership would appear to suggest that Experian is taking a different route to market than competing credit agency Equifax, who launched a competing loss mitigation package in December as a stand-alone product. By integrating with a survelliance provider, Experian is clearly betting that partnering with Clayton will give it an end-to-end solution that “constrained” servicing shops will be more likely to adopt. For more information, visit http://www.clayton.com.