Former Clayton Holdings execs band together to found new due diligence firm

New Diligence Advisors backed by Ranieri and Oaktree’s Selene Holdings

Last year, private mortgage insurer Radian Group announced that it was going restructure its services business, which is conducted through its principal subsidiary Clayton Holdings, due to “recent underperformance below expectations.”

The changes at Clayton, which provides loan due diligence, surveillance, REO management, consulting, valuation, title and settlement services to the mortgage industry, included jettisoning Jeff Tennyson, who served as president of Clayton.

Now, three other former Clayton executives are partnering up to launch a new due diligence firm that will directly compete with Clayton for business.

The new company, which is called New Diligence Advisors, officially launched Friday. The company’s principals are Mark Hughes, Ann Gibbons, and Tom Donatacci, all of whom previously worked at Clayton at various times.

New Diligence Advisors is backed by Selene Holdings, which is the parent company of Selene Finance, a special servicer for non-performing loans, re-performing loans, and REO.

Selene Holdings is owned by funds controlled by Oaktree Capital Management and Lewis Ranieri’s Ranieri Partners Management. Ranieri is considered by many to be the father of mortgage securitization.

Selene Holdings is the primary investor in New Diligence Advisors, and Selene CEO Joe Pensabene will also serve as CEO and president of NDA.

At NDA, Hughes will serve as chief operating officer, where he will be responsible for overseeing production, client satisfaction, technology and rating agency relations.

Hughes joined Clayton in November 2015 as the company’s executive vice president of sales and marketing. Prior to that, Hughes was president of LenderLive’s due diligence division. Before joining LenderLive, Hughes was vice president of due diligence solutions at CoreLogic.

Hughes replaced Donatacci as Clayton’s head of sales and marketing after he left for Selene Finance in 2015. At Selene, Donatacci served as executive vice president of business development.

Prior to that, Donatacci was the senior managing director of sub-servicing and mortgage servicing transactions at GMAC ResCap.

At NDA, Donatacci will serve as a managing director.

Joining Donatacci as a managing director is Gibbons, who had been senior managing director at Clayton. In that role, Gibbons was managing the relationships with some of the firm’s largest clients.

Earlier in her career, Gibbons was chief operating officer of The Murrayhill Company, a credit risk management specialist founded in the 1990s by Sue Allon. Allon would go on to found another due diligence firm, Allonhill, which was later acquired by Stewart Lender Services.

Murrayhill merged with Clayton Services to create Clayton Holdings in April 2005. Clayton was then acquired by Radian in 2014 for more than $300 million.

And now, Hughes, Donatacci, and Gibbons will take on Clayton and other due diligence firms with one of their own.

According to the company, its “comprehensive review service” will offer credit underwriting, property valuations, regulatory compliance, fraud, document, title, payment history and servicing activity.

“We believe that mortgage and capital markets clients are ready for a new approach to due diligence: one based on client service, innovation and technology,” Pensabene said. “NDA will be led by recognized industry leaders, focused on client needs and unencumbered by legacy systems and outdated ideas.”

The company said that it is currently in discussions with ratings agencies and expects to be approved as an accredited third-party reviewer for securitizations by mid-year.

“At a time when other firms are re-thinking their commitment to the TPR space, Selene is investing to build the next generation due diligence platform that will significantly improve risk management and deliver a superior customer experience,” Hughes said.

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