Moody’s proposed establishing ESG “issuer profile scores” and “credit impact scores” for structured finance transactions rated by the firm. DBRS, too, has released its approach to ESG risk factors in credit ratings.
Non-agency MBS with mortgages originated by CDFIs faces scrutiny from rating services; The Change Company pushes back; MBS and ABS investor preferences on credit scoring models.
Moody’s downgraded some of the tranches in loanDepot’s outstanding warehouse financing securitizations even after the company modified the transactions’ governing documents to meet new criteria.
Moody’s placed AAA-rated tranches from four warehouse securitizations on review for potential downgrades following a revision to rating criteria that includes harsher treatment of deals that allow for wet loans.
S&P recently downgraded its view of home prices at the national level to overvalued from undervalued. How rating services view home prices plays a role in credit enhancement levels for non-agency MBS.
Moody’s is considering increasing credit enhancement requirements and capping ratings for mortgage warehouse lending securitizations that allow for “wet” loans.
The non-agency securitization business is hot but maybe it’s too hot? Some market participants contend issuing banks are eyeing the rating services for talent.
The definitions used by non-agency MBS lenders and issuers aren’t consistent and many terms haven’t been updated since 2009. The MISMO and the SFA are separately working on setting new standards.
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