DBRS Publishes Final Rating Methodology for U.S. RMBS Servicing Advance Transactions

DBRS has published its final rating methodology for U.S. RMBS servicing advance transactions. The final methodology does not have any substantive changes from the proposed servicing advance methodology which was published on December 11, 2009 with a request for comments.

The methodology provides an overview of the key factors which DBRS believes could impact the performance of U.S. servicing advance transactions and our approach for rating these 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.

The methodology introduces the basic mechanics of servicing advance transactions and provides the analytical details of DBRS’s criteria for rating such transactions.

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