DBRS Finalizes Ratings on CMAC, Series 2006-C4

Dominion Bond Rating Service (“DBRS”) has today finalized the ratings on the Mortgage Pass-Through Certificates, Series 2006-C4 (the “Certificates”) issued by Canada Mortgage Acceptance Corporation (“CMAC”), as outlined above.

The ratings of the Certificates are based on the following factors:
(1) The relative levels of structural enhancement for each rated class (Class A-1, Class A-2, and Initial Class VFC have 8.75% credit enhancement, Class B has 6.15% enhancement, Class C has 4.10%, and Class D has 2.55%);
(2) Generally high-quality borrowers (the weighted-average credit score on origination was 696);
(3) The experience of GMAC Residential Funding of Canada, Limited (“RFOC”) and its parent, Residential Funding Corporation in the residential mortgage market;
(4) The inclusion of insured mortgages (approximately 21.52%), which are expected to experience very low credit loss.

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 non-insured mortgages originated by RFOC are classified as prime, Alt-A, or sub-prime. Alt-A and sub-prime mortgages typically experience higher foreclosure frequency and loss severity than prime mortgages. A large percentage of Alt-A and sub-prime mortgages is from i declare product, which represents 43.2% 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 Residential Funding Corporation and is focusing on insured, Alt-A, prime, and sub-prime mortgages in Canada.

Note:
Initial Class VFC, Class IO-C, Class E, and Class F are non-offered Certificates.