DBRS Rates CSMC Trust 2013-IVR1 Mortgage Pass-Through Certificates, Series 2013-IVR1

DBRS, Inc. (DBRS) has assigned the following ratings to the Mortgage Pass-Through Certificates, Series 2013-IVR1 issued by CSMC Trust 2013-IVR1 (the Trust).

-- $ 252.0 million Class A-5 rated at AAA (sf)
-- $ 109.4 million Class A-8 rated at AAA (sf)
-- $ 252.0 million Class A-5-X-1* rated at AAA (sf)
-- $ 252.0 million Class A-5-X-2* rated at AAA (sf)
-- $ 109.4 million Class A-8-X-1* rated at AAA (sf)
-- $ 109.4 million Class A-8-X-2* rated at AAA (sf)
-- $ 361.4 million Class A-1ᵉ rated at AAA (sf)
-- $ 361.4 million Class A-2ᵉ rated at AAA (sf)
-- $ 252.0 million Class A-3ᵉ rated at AAA (sf)
-- $ 109.4 million Class A-4ᵉ rated at AAA (sf)
-- $ 361.4 million Class A-6ᵉ rated at AAA (sf)
-- $ 252.0 million Class A-7ᵉ rated at AAA (sf)
-- $ 109.4 million Class A-9ᵉ rated at AAA (sf)
-- $ 361.4 million Class A-X-1*ᵉ rated at AAA (sf)
-- $ 5.8 million Class B-1 rated at AA (sf)
-- $ 5.8 million Class B-2 rated at ‘A’ (sf)
-- $ 5.8 million Class B-3 rated at BBB (sf)
-- $ 5.3 million Class B-4 rated at BB (sf)

• Denotes interest-only certificates. The class balances represent notional amounts.
  ᵉ Denotes Exchangeable Certificates. These certificates can be exchanged for combinations of initial exchangeable certificates as specified in offering documents.

The AAA (sf) ratings in this transaction reflect the 7.30% of credit enhancement provided by subordination. The AA (sf), “A” (sf), BBB (sf) and BB (sf) ratings reflect 5.80%, 4.30%, 2.80% and 1.45% of credit enhancement, respectively. Other than the specified classes above, DBRS does not rate any other classes in this transaction.

The Trust contains a portfolio of prime residential mortgage loans. The Originators for the mortgage pool are First Republic Bank (25.5%), Quicken Loans, Inc. (17.7%), Skyline Financial Corp. (10.6%), First Savings Mortgage Corporation (10.4%), PHH Mortgage Corporation (6.2%), Caliber Funding LLC (6.1%), BofI Federal Bank (5.4%) and various others originators (18.1%). The loans will be serviced by Select Portfolio Servicing Inc. (68.3%), First Republic Bank (25.5%) and PHH Mortgage Corporation (6.2%). Wells Fargo Bank, N.A. (“Wells Fargo”) will act as the Master Servicer and Securities Administrator and Christiana Trust, a division of Wilmington Savings Fund Society, FSB will serve as trustee. The transaction employs a senior-subordinate shifting-interest cash flow structure that is enhanced from a traditional one.

The Originators provide traditional life-time representations and warranties to the Trust. The enforcement mechanism for breaches of representations includes automatic breach reviews by a third-party reviewer for any seriously delinquent loans and resolution of disputes are ultimately subject to determination in arbitration proceeding. The loans (except for First Republic) also benefit from representations and warranties back-stopped by the seller, DLJ Mortgage Capital, Inc., a wholly owned subsidiary of Credit Suisse (USA), Inc., in the event of an originator’s bankruptcy or insolvency proceeding and if the originator fails to cure, repurchase or substitute such breach or loans. However, such a backstop is subject to certain sunset provisions that give consideration to prior loan performance.

DBRS views the representation and warranties features for this transaction to be stronger than those included in the two most recent Credit Suisse prime jumbo transactions (CSMC 2012-CIM3 & CSMC 2013-TH1). However, the relatively weak financial strength of certain originators coupled with the sunset provisions on the backstop by DLJMC still demand additional penalties and credit enhancement protections. The full description of the representations and warranties standard, the mitigating factors and the DBRS analysis are detailed in the related rating report.

Note:
All figures are in U.S. dollars unless otherwise noted.

The applicable methodologies are:
• RMBS Insight: U.S. Residential Mortgage-Backed Securities Loss Model and Rating Methodology
• Unified Interest Rate Model for U.S. RMBS Transactions
• Third-Party Due Diligence Criteria for U.S. RMBS Transactions
• Representations and Warranties Criteria for U.S. RMBS Transactions
• Legal Criteria for U.S. Structured Finance Transactions

The full rating report providing additional analytical detail is available by clicking on the link or by contacting us at info@dbrs.com.

The Rule 17g-7 Report of Representations and Warranties is hereby incorporated by reference and can be found by clicking on the link or by contacting us at info@dbrs.com.

This rating is endorsed by DBRS Ratings Limited for use in the European Union.