DBRS Publishes Methodology: Operational Risk Assessment for European RMBS Servicers

DBRS has today published its methodology for the operational risk assessment of European Residential Mortgage-Backed Securities (RMBS) servicers. In this methodology, DBRS outlines its procedures used to evaluate the quality of the parties that service or conduct backup servicing on the loans that are about to be securitised or have previously been securitised in a transaction rated by DBRS.

While DBRS does not assign formal ratings to these processes, it does conduct operational risk reviews to determine if a servicer is acceptable and incorporates the results of the review into the rating process for new transactions and into the surveillance process for outstanding transactions to be rated by DBRS. It should be noted that DBRS recognises that there are different rules, regulations and practices for each jurisdiction in Europe and as such tailors its approach as applicable.

This new methodology replaces and supersedes the servicer section in the DBRS Master European Residential Mortgage-Backed Securities Rating Methodology, and therefore DBRS has amended its methodology to reflect this change, with no other changes.

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