April 2026
Key Trends in DSCR Valuations, Compliance & Client Connectivity
In this month’s issue, we’re covering a lot of ground: everything from DSCR lending and the importance of valuations in this space to key insights into compliance and enforcement trends from Jennifer Keys, SVP-Compliance for Covius. Additionally, we take a look at how Clayton is expanding its API integrations and the importance of meeting clients where they want to transact. Speaking of meeting clients, if you’re headed to MBA Secondary next month in New York City, let’s connect! Our team will be on site and ready to discuss how Covius can support your business needs.
Pete Pannes
Chief Business Officer
How Your Valuation Partner Can Make or Break Your DSCR Deal
As investor-driven lending gains momentum, DSCR loans are becoming a more active segment in the market. But while originations are accelerating, many lenders are running into a familiar challenge: valuations that aren’t built for income-based lending.
Unlike conventional loans, DSCR underwriting hinges primarily on the property’s ability to generate income, and less so, if at all, on the borrower’s credit profile. That means rental data, market rent assumptions and income support carry significantly more weight. This is exactly where breakdowns tend to happen. Service 1st is helping lenders close that gap.
Rather than treating DSCR like a standard appraisal assignment, Service 1st works directly with its appraiser network to emphasize what matters most: credible rent analysis, strong income support and the inclusion of an income analysis approach where required. The result is a more accurate first pass and fewer downstream revisions tied to rental income disputes or missing data.
That matters in a segment where reconsiderations are more common and more complex. DSCR lenders often bring additional lease data, historical rents or portfolio-level insights into the process, requiring a valuation partner who can respond quickly and incorporate that information effectively. Service 1st’s more hands-on, flexible approach allows lenders to resolve these issues without the delays often associated with high-volume, assembly-line AMCs.
At the same time, as scrutiny around DSCR lending grows, independence and quality control are becoming even more critical. Service 1st provides an added layer of separation between lender and appraiser, ensuring appraisals are thoroughly reviewed, supported and defensible without pressure to “make the numbers work.”
As lenders continue to scale their DSCR strategies, having the right valuation partner in place can be the difference between closing on time and losing the deal. Contact Dante Petrella, Inside Sales/Customer Service Representative for Service 1st to discuss how Service 1st can help you.
Meeting Clients Where They Want to Transact: Why Clayton Is Expanding Its Integrations
In today’s environment—marked by heightened regulatory scrutiny, growing cybersecurity threats, increased third‑party reliance and a sharper focus on operational resilience—clients must evaluate not only capacity risk, but technology risk as well. This is especially true for API integrations, which are becoming the preferred way for vendors and clients to connect and scale efficiently. To learn more about Clayton’s overall integration strategy, we recently had a conversation with Clayton EVP of Operations Tony Neske and Covius SVP of Product Strategy Dustin Wallace.
Responding to New (and Sometimes Still Unclear) Rules
From increased state-level activity to ongoing operational pressure, staying compliant requires more than just keeping up, it demands a proactive strategy. In our latest compliance update, Jennifer Keys breaks down what’s happening now and what it means for lenders, servicers and capital markets participants navigating today’s compliance landscape.
Don’t Let the 2026 MERS Annual Review Sneak Up on You
Now is the time to get ahead of your 2026 MERS Annual Review. Servicers with 1,000 or more MERS loans as of March 31st are required to engage a qualified third-party vendor and complete their review by December 31st—and submissions open on June 1, 2026.
Clayton offers deep expertise and a proven track record in helping servicers navigate MERS requirements with confidence. From preparation through submission, Clayton helps ensure compliance, reduce risk and avoid costly fines or potential member suspension.
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