Analysts at Morningstar Credit Ratings have begun to see non-agency single-property investor loans materialize with a new twist: less dependence on the borrower’s ability to repay and more reliance on the cash flow stream of rental income. “The majority of loans made to landlords backed by single properties are underwritten as consumer loans, not business-purpose loans. The lender will scrutinize the borrower’s credit, income and assets,” RMBS analysts Brian Grow, Becky Cao and Olgay Cangur said in a new report. Also, rental income is included as part of the borrower’s overall income when calculating the borrower’s personal debt/income ratio and, thus, the probability of default. “Recently, Morningstar has been presented...