Clayton Holdings molds a new company
Clayton Holdings, whose business of reviewing mortgage securities portfolios brought it scrutiny after that market went belly up, is acquiring a Utah entity that helps financial companies sell off the properties they have picked up as a result of foreclosures and other means.
The deal comes even as New York and federal prosecutors promised to open the books anew on the commercial mortgage-backed securities (CMBS) market, creating a task force of more than 50 investigators.
Following the 2008 collapse of the loan market, Clayton Holdings itself was subpoenaed by the state of New York as part of an investigation, but the Shelton-based company was never publicly accused of wrongdoing and cooperated in a larger probe of the CMBS fiasco.
“In hindsight, we got away from the roots, which is saying, ”˜This is a good loan that is going to pay, and this is a bad loan,”™” Reuters quoted Clayton Holdings”™ former chief operating officer saying in 2007.
That year, Clayton Holdings”™ then-CEO Frank Filipps began investigating the company”™s options given what it termed a “challenging economic environment in the industries” in which Clayton Holdings did business. In November 2007, a representative of Norwalk-based Greenfield Partners called sparking an initial meeting with Filipps and Greenfield CEO Gene Gorab, followed by a due diligence process and ultimately a short bidding war that would result in the company”™s striking a buyout deal in April 2008.
Since orchestrating the sale of Clayton Holdings, Filipps has kept active in the industry as a director of Irvine, Calif.-based Impac Mortgage Holdings Inc., Fortegra Financial Corp. of Jacksonville, Fla., and Bermuda-based Primus Guaranty Ltd.
Clayton has since been led by Paul Bossidy, previously a longtime executive with Fairfield-based General Electric Co. and its GE Capital subsidiary in Norwalk.
“Our records were examined,” Bossidy said. “I wanted to make sure that Clayton was a reputable company ”¦ That has all been true.”
Sue Allon, a former Clayton Holdings director who left to start a rival company in Colorado where Clayton Holdings has an office a few miles distant, recently won distinction from Chief Executive magazine as maintaining one of the top 10 CEO blogs. Allonhill L.L.C. calls its mission to “bring credibility back to the mortgage industry” on its website; its senior staff is stocked with multiple Clayton Holdings alumni, including one who sparked a short bout of noncompete litigation between the companies.
In January, Clayton Holdings acquired Green River Capital L.C., which consults to banks and other financial companies on real estate they own the result of foreclosures and short sales. West Valley, Utah-based Green River employs 200 people, adding to Clayton Holdings”™ existing staff of 500 people. While that is 100 more employees than it had in 2007 as its prospects soured, the company uses a far smaller cadre of independent loan analysts than it did at the height of the housing bubble.
How far has Clayton Holdings come full circle? That is perhaps best illustrated by its single largest client ”“ the federal government. The Office of the Comptroller of the Currency contracted with Clayton Holdings and several other companies to examine foreclosure documents of banks for any patterns that might raise a red flag to regulators.
“It”™s a very high profile assignment,” Bossidy said. “They have their trust in us.”