36 min ago  Comment 
As automated marketplaces threaten to make many jobs obsolete, industry influencers must heed warnings of social unrest Several years ago when media companies were still working out what the “long tail” meant to them, Clay Shirky shared a key...
The Hindu Business Line  Nov 19  Comment 
Tupperware has launched Rice Smart, which comes with a drawer designed to dispense rice. This can be kept on the kitchen counter, as against the conventional steel bins or clay urns which are usua...
Insurance Journal  Nov 12  Comment 
The Westfield Insurance Foundation is creating the James R. Clay Scholarship to honor its outgoing chairman and CEO. The Ohio Farmers Insurance Co. (OFIC) board of directors authorized the transfer of $100,000 to the Foundation to establish an...
Insurance Journal  Nov 9  Comment 
Kinsale Insurance Co. has launched a new law enforcement/police professional product. This is the initial product in Kinsale’s recently established Public Entity Division. Per Clay Rhoades, Kinsale vice president, law enforcement/police...
NPR  Oct 23  Comment 
New media expert Clay Shirky explains how the ideas behind open source have been used for centuries: from the Enlightenment to the digital era.
Clusterstock  Oct 21  Comment 
A huge  party palace in  Laguna Beach, California, is up for grabs — if you have $20 million to spare. The Wall Street Journal reports that the seller is entrepreneur Clay Berryhill, who made millions when he sold his company, Simple...
Forbes  Oct 20  Comment 
Clay Hebert has helped over 140 entrepreneurs raise over $40 million in crowdfunding. The funding part is incidental. His wisdom on how to attract a crowd is worth taking the time to listen to this recent interview.


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Clayton Holdings (CLAY)operates in the non conforming mortgage industry. There are three main business divisions. The first provides due diligence services for creators of MBS. In that role CLAY will review loans put in a pool and verify that the loans conform or do not conform to the pool's specifications. The second provides surveillance of MBS pools. In that role CLAY will look for patterns it has recognized in the past as consistent with fraud. If a fraudulent or non conforming loan is discovered the owners of the pool can put the loan back to the issuer. The company has been able to cover its fees by 3 or 4 to one ratio. The third is as a special servicer. In early 2007 the company received a special servicer designation from S&P. At the time only seven special servicer designations existed and nearly all were to subsidiaries of large financial institutions.

Subprime lending

A major issue is regarding the work outs, i.e. when the lender compromises with the borrower to avoid default and repossession. Many non traditional loans, such as ARMs or interest only loans, were packaged together and sold in a security. As such, the security owns the loan and not the bank. There is specific language in the securitiztions that prohibits working something out with the borrower. Thus when the billions of dollars of ARMs renew from late 2007 to 2008, many will result in default and repossession that would have been able to be worked out.


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