DBRS Prov. Rates Canada Mortgage Accept. Corp Ser 2005-C3

Dominion Bond Rating Service (“DBRS”) has assigned provisional ratings to the Mortgage Pass-Through Certificates, Series 2005-C3 issued by Canada Mortgage Acceptance Corporation (“CMAC”), as outlined above.

The finalization of ratings is contingent upon receipt of final documents conforming to information already received.

The ratings of the Pass-Through Certificates, Series 2005-C3 (the “Certificates”) are based on the following factors:
(1) The relative levels of structural enhancement for each rated class (Class A has 12.0% credit enhancement, Class B has 8.4% enhancement, Class C has 5.55%, and Class D has 3.45%).
(2) Generally high quality borrowers (the weighted average credit score on origination was 691).
(3) The experience of GMAC Residential Funding of Canada, Limited (“RFOC”) and Residential Funding Corporation in the residential mortgage market.

The Class IO-P and Class IO-C Certificates represent interest-only “strips” and are sensitive to prepayment assumptions. The AAA rating reflects the Class IO Certificateholders’ interest in excess interest collections over expenses and certificate interest, and does not evaluate the risks associated with prepayment.

Generally, the mortgages originated by RFOC are classified as Alt-A or sub-prime, which typically experience higher foreclosure frequency and loss severity than prime mortgages. The product lines are skewed towards i declare, which represents 53% of all mortgages. The i declare product does not verify the income level of borrowers. Lack of income verification can suggest income volatility, but subordination levels have been sized to provide for this.

RFOC is a wholly owned subsidiary of GMAC Residential Funding Corporation and is focusing on Alt-A, prime, and sub-prime mortgages in Canada.