DBRS Releases Updated Methodology for Rating Canadian Residential Mortgages, HELOCs and Reverse Mortgages

DBRS Limited (DBRS) has today released an updated version of its “Rating Canadian Residential Mortgages, Home Equity Lines of Credit and Reverse Mortgages” methodology, which supersedes the version published in November 2015. Publication of the updated methodology is part of DBRS’s ongoing effort to provide greater transparency to the ratings process by outlining the various factors that DBRS expects to see in transaction documentation, particularly for transactions rated or assessed at AAA (sf) or equivalent.

The discussion on refinancing risk has been moved to its own section with clarification of the analysis for loss severity. In addition, the analysis for National Housing Act Mortgage-Backed Securities with respect to negative carry if Canada Mortgage and Housing Corporation is rated below AAA has been clarified. Finally, editorial changes to clarify certain sections are made in the updated version.

DBRS does not deem the above changes to be material and has determined that the updated methodology has no rating impact on existing Canadian structured finance ratings backed by these asset classes.

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

For more information on this credit or on this industry, visit www.dbrs.com or contact us at info@dbrs.com.