DBRS Morningstar finalized its “Rating and Monitoring U.S. Reverse Mortgage Securitizations” methodology, as well as the new exhibits in the “Operational Risk Assessment for U.S. RMBS Originators” and “Operational Risk Assessment for U.S. RMBS Servicers” methodologies for the U.S. reverse mortgage asset class.
The methodologies present the criteria for which new U.S. reverse mortgage ratings are assigned and/or monitored.
The “Rating and Monitoring U.S. Reverse Mortgage Securitizations” methodology supersedes the prior version (named “U.S. Reverse Mortgage Securitization Ratings Methodology”) published on May 8, 2020, and is effective as of November 23, 2022. Accordingly, DBRS Morningstar will subsequently withdraw and archive its “U.S. Reverse Mortgage Securitization Ratings Methodology” after all outstanding ratings have been updated.
The “Operational Risk Assessment for U.S. RMBS Originators” and the “Operational Risk Assessment for U.S. RMBS Servicers” methodologies were each updated to include a new U.S. reverse mortgage exhibit and supersede the prior versions published on December 23, 2019, and December 2, 2020, respectively, and are effective as of November 23, 2022.
Finalization of these methodologies follows the conclusion of the request for comment period that began on November 7, 2022. DBRS Morningstar received no comments during the request for comment period.
Based on its preliminary impact analysis, DBRS Morningstar has determined that the vast majority of the outstanding credit ratings in the reverse mortgage asset class are not likely to experience a change, and some may experience upgrades as a result of these updates.
All comments received during the request for comment period have been published to the DBRS Morningstar website, except in cases where confidentiality is requested by the respondent.
The DBRS Morningstar Sovereign group releases baseline macroeconomic scenarios for rated sovereigns. DBRS Morningstar analysis considered impacts consistent with the baseline scenarios as set forth in the following report: https://www.dbrsmorningstar.com/research/384482.
DBRS Morningstar methodologies are publicly available on its website www.dbrsmorningstar.com under Methodologies & Criteria.
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