Early Buyout Reviews
Clayton’s EBO testing delivers transparency regarding potential risks and servicing compliance for loan pools purchased through an early buyout. Testing can include a one-time review or, to mitigate ongoing risk, a client may choose continuous testing.
Our methodology includes an individual loan-level review that identifies if the early buyout was processed according to the applicable HUD guidelines. We further validate the loan servicing accuracy following the default and the servicer’s borrower communication attempts in an effort to cure the delinquency.
Additionally, an optional targeted mortgage insurance review provides transparency into the accuracy of maintaining mortgage insurance premium (MIP) coverage, the processing of canceled mortgage insurance coverage and the remittance of applicable MIP refunds.
Clayton® also offers additional loan-level testing, such as loss mitigation, foreclosure, SCRA, reporting and claim reconciliations, targeting high-risk FHA servicing subjects to mitigate risks further. This testing can be completed simultaneously with the loan purchase review or may be selected for ongoing review to ensure compliance with HUD guidelines.