Due diligence firm Clayton Holdings announced the launch of a new business segment to help clients assess risks associated with mortgage servicing transactions. The unit comes at a time when servicing shops and banks are frequently involved in the mass sale and transfer of MSRs.

The company officially launched Clayton's MSR Transaction Services Thursday. The business unit will study transactions to ensure originators, servicers and third-party vendors are in compliance with all regulations, standards and practices.

In addition, the group will study the underlying collateral and borrower risk using lien searches, pay history and collection comment reviews.

Clayton's platform has the ability to evaluate escrow and advance-fee reconciliation and compensation fees, while also conducting ARM audits to assess errors from previous mortgage servicers.

Clayton's staff will assist companies transferring MSRs in mass by ensuring an appropriate subservicing platform is recommended and assessed. During the MSR transfer, Clayton will continue its review process, ensuring all critical steps are validated during the transfer.

The Clayton Holdings MSR Transaction Services unit arrives at a time when banks and servicers are continuously involved in the mass transfer of servicing rights. Last year alone, firms such as Ocwen and Nationstar Mortgage Holdings made headlines by scooping up billions worth of MSRs. 

These mass transfers caused analysts with ratings giants such as Fitch to question whether servicers taking on new capacity so quickly have the controls needed to address the underlying risk.

It appears Shelton, Conn.-based Clayton read into these market trends and decided MSR transaction due diligence is a needed service in today's environment.

"Our new MSR Transaction Service builds on this experience and our deep bench strength in loan file reviewers to deliver a full array of offerings that will help both buyers and sellers efficiently identify the value and risks in the MSR deals that are coming to market," said Tom Donatacci, executive vice president of Clayton Holdings.