DBRS Requests Comments on Proposed Rating Methodology for Rating U.S. RMBS Servicing Advance Transactions

DBRS is requesting comments on the proposed rating methodology for U.S. servicer advance transactions backed by reimbursement rights for advances made to residential mortgaged-backed security (“RMBS”) trusts. Comments should be received on or before January 11, 2010. Please submit your comments to the following e-mail address: dbrsusservicingcomments@dbrs.com. DBRS will publish a final methodology following the review and evaluation of all submissions.

The methodology provides an overview of the key factors which DBRS believes could impact the performance of servicer advance transactions and the approach for rating such transactions. These factors include:

•Operational expertise and financial condition of the servicer;
•Historical advance recovery rates of the servicer;
•Transaction capital structure, proposed ratings and credit enhancement;
•Cash flow analysis;
•Legal structure and opinions.

As part of the rating process, DBRS performs an operational risk review of the servicer to provide insight into how the servicer’s operational capabilities have impacted past performance. The review also assists in establishing expectations for future performance. In addition, for each requested rating, DBRS develops cash flow stress assumptions based upon the proposed transaction structure to test the interest and timing mismatches between the advance recoveries and the note obligations under various scenarios.

DBRS criteria and methodologies are publicly available on its website www.dbrs.com under Methodologies.

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.