Clayton Introduces Suitability Tool

Clayton Holdings Inc., a provider of information and analytics to the banking and fixed-income securities markets, has introduced an analytic tool to help large lenders and Wall Street conduits determine whether closed loans they are buying meet prevalent "suitability" standards.The first release of the product focuses on payment shock and recalculates ability-to-pay using a fully indexed, fully amortized schedule, the company said. The suitability issue -- the contention that lenders are responsible for ensuring that a loan is suitable for a specific borrower -- has gained momentum as subprime loan defaults and foreclosures have mounted, Clayton noted. "There are layers to the debate -- and the definitions -- around suitability and nontraditional mortgages," said Keith Johnson, Clayton's chief operating officer. "Rather than wait for it to be fully defined and legislated, we assessed the issues currently being debated, spoke with our clients, and determined what is immediately needed to address this issue." Clayton, based in Shelton, Conn., can be found online at http://www.clayton.com.