DBRS Maintains DR Residential Mortgage Trust’s Ratings Under Review with Developing Implications

DBRS has today maintained the ratings of the medium-term notes (the Notes) issued by the DR Residential Mortgage Trust (the Trust) Under Review with Developing Implications. This reflects the ongoing negotiation and restructuring of funding arrangements for the Trust and the maturity mismatch of underlying assets and the Notes, which are subject to a standstill agreement (the Standstill Agreement) until September 30, 2008. DBRS stated in a press release dated July 14, 2008, that if timely resolution of these negotiations is not achieved before the Standstill Agreement expires, the ratings of the Notes may be subject to further rating actions.

Furthermore, DBRS has informed DR Residential Mortgage Advisors, the administrator of the Trust, of the requirement to meet the criteria for a conduit sponsor (please see the link below to the January 26, 2006, press release “DBRS Releases Criteria for New ABCP Conduit Sponsors” for further details) by December 31, 2008. Failure to meet the criteria on or before December 31, 2008, may also result in the ratings of the Notes being subject to further rating actions. No new assets will be allowed to be added to the Trust until the above sponsor criteria is met and the Trust is restructured to address several issues, including the maturity mismatch of assets and liabilities.

The Notes are backed by multi-family residential mortgages insured by Canada Mortgage & Housing Corp. (CMHC; rated AAA/R-1 (high) by DBRS) and uninsured multi-family mortgages. There has never been any loss incurred on CMHC-insured mortgages since the Trust commenced issuing notes nor any arrears on uninsured multi-family mortgages since their inclusion in the Trust’s assets in 2002. The Under Review with Developing Implications status does not reflect the credit quality of the underlying assets or the credit protection available.