PRESS RELEASE


Fraud Detection Product Suite Launched

Features enhanced due diligence, put back review and trending analysis

SHELTON, Conn.--(Jan. 29, 2006) --Clayton Holdings (www.clayton.com), a provider of information-based analytics, outsourcing and consulting solutions to leading capital markets firms, fixed income investors and loan servicers, today announced a new suite of fraud detection services designed to protect conduits, Wall Street issuers and mortgage-backed securities (MBS) bond and residual holders from losses due to origination fraud and breaches of representations and warranties.

The new services draw upon Clayton's extensive due diligence and credit risk surveillance experience, and leverage the information contained in Clayton's database of more than $1 trillion in subprime and Alt-A loans. They include:

• High-Risk Loan Identification: This service is offered as an enhancement to Clayton's traditional due diligence services, or as a standalone review of post-securitized loans, whether or not they are being monitored by Clayton. The new service evaluates entire pools of loans, using Clayton's proprietary risk screens to identify "high-risk" loans that merit additional review or re-underwriting.
  
• Expanded Fraud Reviews: Clayton offers the option of an in-depth fraud review in conjunction with its standard due diligence credit and compliance services. Developed for use on loans identified as high-risk, the expanded review targets specific loan characteristics and employs third-party database search tools to identify potentially fraudulent loans.
  
• Put-Back Reviews: MBS issuers and investors can now outsource the re-underwriting of troubled loans to Clayton for comprehensive put-back reviews by experienced underwriters. The focus of the review is to identify breaches of representations and warranties, including fraud or misrepresentation, misuse of loan programs, missing conditions, discrepancies and compliance issues. Reviews include:

• Trending Analysis: Clayton's suite of fraud risk management services provides clients with trending analysis on either an ongoing basis or at the end of the put-back process. It examines the findings of the high-risk screen, the expanded fraud review, and the put-back review, highlights states and zip codes where most put-backs occurred, and analyzes the characteristics of the put-back loans: credit scores, loan purpose, occupancy, debt ratios, documentation levels, etc. It also cross-references put-back loans to brokers and appraisers on Clayton's "watch list."

"We developed these services in close consultation with our capital markets and bondholder clients," said Keith Johnson, President and Chief Operating Officer of Clayton. "We're drawing on the breadth and depth of our data, experience and technology to spot issues prior to securitization, and we have the analytics and surveillance tools to identify exceptions that, when cured, enhance bond performance. Our new fraud services not only reduce fraud and early payment default exposure, but increase client efficiency and enhance understanding of this problem."

SOURCE: Clayton Holdings Inc.