September 2025

Reduced-Scope HE Reviews, Mitigating Commercial Real Estate Risk & Conference Season in Full Swing

With conference season in full swing again, we are connecting with colleagues and clients across the country, and one topic is dominating conversations: the Fed’s recent rate cut and what impact it may have on the market. As we continue to keep an eye on rates, we’re also focusing on other critical areas in our industry and are bringing them to the forefront. For example, this month’s issue discusses how rating agencies are approaching reduced-scope home equity reviews, features strategies for mitigating risk in commercial real estate from our Clayton Commercial group and examines some of the biggest challenges in today’s appraisal market and how Covius’ valuation and QC firm, Service 1st, is tackling them.

P.S. If you’re attending this month’s Five Star conference, I hope you’ll join us at the iconic Waterproof rooftop lounge September 29 to kick off the event – RSVP below.

Pete Pannes
Chief Business Officer

Ratings Agencies & Reduced Scope Home Equity Reviews

In the first half of 2025, there were 26 rated securitizations backed by home equity assets—either home equity lines of credit or closed end seconds. As a prerequisite to rating these deals, the credit rating agencies require standard, full third-party reviews of all the loans in each deal, costing around $500/loan, which has been a pain point for issuers and one of the reasons why some aggregators decide to sell home equity loans directly to insurance companies rather than taking the securitization route. Over the years, several issuers have approached Clayton to help them make the case with rating agencies for reduced scope reviews. In his latest blog, Joe Ozment, Clayton’s VP of Client Services & Securitizations, shares some insight and gives some perspective on where the ratings agencies stand on this issue.

Covius’ Five Star Reception - You’re Invited!

Heading to Dallas later this month for Five Star? Join us at our private reception Monday, 9/29. We’re kicking off the conference Monday night at the rooftop lounge of the Waterproof atop the Statler Hotel with craft cocktails and panoramic views of downtown Dallas. Space is limited so RSVP by Thursday, September 25 to attend. See you there!

Mitigating Risk in Commercial Real Estate

Covius’ Clayton operation is well-known for residential due diligence and servicer oversight; but for two decades, we have also been a trusted service provider on the commercial side of the real estate industry. In this issue, we sat down with Nathan Collins, who heads Clayton’s Commercial Real Estate practice, to get a sense of the current challenges that commercial servicers face and how Clayton is helping to mitigate them.  

The Lender’s Playbook Podcast

Service 1st’s Pete Gianfrancesco joined Matt Rosen, host of the Lender’s Playbook podcast, for a discussion about the evolving world of valuations and appraisals, including an analysis of some of the biggest challenges faced in today’s appraisal market and the trends shaping the future of valuations.

Covius Gives Back

Fall is here and golf events are in full swing! Teams across our entire organization gathered to tee off for several worthwhile charity events over the past month, including Rocket Mortgage’s Tammy Z Memorial Golf Classic, the Homes for Our Troops Golf Classic, the PenFed Foundation for Military Heroes’ 22nd annual Military Heroes Golf Classic and the Towers of Excellence 8th Annual Towers Golf Tournament. Covius is proud to have sponsored each of these events and contributed to the impact they have in people’s lives.

Confirm MERS Compliance with Clayton

MERS member organizations that have serviced 1,000 or more MERS loans by March 31st must engage a qualified third-party vendor to complete an Annual Review confirming their compliance with system rules by December 31st. Clayton Servicing Oversight is the experienced and knowledgeable partner that can make your review seamless and help you avoid hefty fines and member suspension. Let the Clayton Servicing Oversight team help you confirm your compliance.