DBRS Updates Methodology for Canadian Residential Mortgage Servicer Evaluations

DBRS has today released its updated methodology for evaluating servicers of Canadian residential mortgages. The publication of this methodology is part of DBRS’s continued effort to provide market participants with insight into the rationale behind DBRS’s operational risk reviews. This updated methodology supersedes the version published in March 2011. Current evaluation of Canadian residential mortgage servicers will not change as a result of this update.

This updated methodology maintains the essence of the previous version, which is based on the review and evaluation of eight key factors, as well as any additional factors DBRS considers important. The changes in this updated methodology are:

-- Expansion of servicer roles to include primary sub-servicer, warm backup servicer and hot backup servicer.
-- The addition of a review agenda as an appendix to the methodology.

DBRS expects all servicers involved in securitization of Canadian residential mortgages to be reviewed according to this methodology, with the exception of insured mortgages administered by approved lenders of mortgage insurers.