U.S. - Structured Finance

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1 U.S. - Structured Finance Special Report RMBS Report Date Analysts Jonathan Riber Vice President jriber@dbrs.com Quincy Tang Managing Director qtang@dbrs.com Kathleen Tillwitz Managing Director ktillwitz@dbrs.com Claire Mezzanotte Group Managing Director cmezzanotte@dbrs.com Qualified Mortgage and Ability-to-Repay Rules Table of Contents Highlights 1 QM Safe Harbor Loans to Rule the Market 5 Summary 1 Securitization Outlook 5 Understanding the QM and ATR Rules 2 Rating Considerations 6 QM Safe Harbor Loans 3 Origination Controls and Procedures 6 QM Rebuttable Presumption Loans 3 Residual Income Determination 7 Non-QM Loans 3 Third-Party Due Diligence Review 8 Other Loans Affected 4 Representations and Warranties Framework 9 Discussions with Market Participants 5 What DBRS Expects 9 Noteworthy Market Comments 5 Highlights In this special report, DBRS: Discusses the Qualified Mortgage (QM) and Ability-to-Repay (ATR) rules issued by the Bureau of Consumer Financial Protection (the Bureau). Highlights its discussions with market participants who have shared their interpretations and opinions of the new rules and their implications. Offers perspective on how it will generally evaluate new private-label residential mortgagebacked security (RMBS) transactions under the QM and ATR rules. Summary Much of the mortgage industry s attention has been focused on understanding the upcoming QM and ATR rules (the Rules) issued by the Bureau. The Rules require lenders to demonstrate that they have made a good faith determination, based on verified and documented information, and that a borrower has a reasonable ability to repay his or her loan according to its terms. For years, the absence of such a determination was quite commonplace, and this is now considered a key factor in the creation of the housing bubble and its bursting that began in The Rules, which implement provisions in the Dodd- Frank Act, take effect on January 10, 2014, and are aimed at making a reoccurrence of a risky real estate bubble much less likely. Because certain components of the Rules are somewhat vague and open to interpretation, market participants are still trying to fully grasp how they will be affected. Main items of concern revolve around the treatment of loans that do not fall under the safe harbor rules, exposure to borrower claims and defenses, underwriting and documentation standards as they relate to determining a borrower s residual income under ATR standards and rating agency considerations. Since most of what is being originated today already meets the standards of the Rules, DBRS believes that the real challenge lies in unequivocally demonstrating QM and ATR compliance to the market and establishing confidence in the soundness of the systems and procedures that will be used to determine and ensure compliance.

2 Understanding the QM and ATR Rules To meet the new standards, lenders must consider, verify and document that the consumer has sufficient income and assets to repay the loan, generally considering the following eight underwriting criteria: 1. Current or reasonably expected income or assets; 2. Current employment status; 3. Monthly payment on the covered transaction; 4. Monthly payment on any simultaneous loan; 5. Monthly payment for mortgage-related obligations; 6. Current debt obligations, alimony and child support; 7. Monthly debt-to-income (DTI) ratio or residual income; and 8. Credit history. The following are the general characteristics of a QM loan: Limits on Loan Features - No interest only loans - No negative amortization loans - No deferral of principal - No balloon loans - Interest rate that does not exceed the average prime offer rate (APOR) for comparable transactions by 1.5% or more (for first liens) - Maximum term of 30 years - No reverse mortgages or home equity lines of credit (HELOCs) Underwriting Requirements - Based on verified current or reasonable expected income or assets and current debt obligations, alimony and child support - Monthly DTI ratio may not exceed 43% - Underwritten based on the maximum interest rate during the first five years Points and Fees - Generally points and fees may not exceed 3% of the total loan amount - Higher caps allowed for loans less than $100,000 DBRS expects that lenders will have policies, procedures and internal controls that ensure compliance with each of these eight factors, in addition to documenting how these factors are considered in their underwriting process. The Rules generally prohibit loans with negative amortization, interest-only payments, balloon payments or terms exceeding 30 years from being a QM. Additionally, no-doc loans cannot be a QM. Further, a loan generally cannot be a QM if the points and fees paid by the consumer exceed 3% of the total loan amount. The standards provide guidance on the calculation of points and fees and include higher percentage thresholds for smaller balance loans. The points and fees definition generally includes all fees known at or before consummation and fees paid to the originator, creditor and affiliates. Certain lenders have expressed concern, stating that a 3% cap leaves little room for unanticipated costs, and have been contemplating whether to discontinue affiliated services such as title insurance and appraisals. While affiliate charges have always been included for Home Ownership and Equity Protection Act (HOEPA) purposes, they become much more significant given the lower points and fees threshold in the QM definition. The Rules also establish general underwriting criteria for QMs, which the Bureau believes will protect consumers by safeguarding affordability. The Rules require that the consumer have a DTI ratio that is less than or equal to 43%. Monthly payments must be calculated based on the highest payment that will apply in the first five years of the loan. 2 Special Report - Structured Finance: U.S. RMBS

3 The Rules provide that making a QM loan that adheres to these specified product guidelines and underwriting standards offers legal protections to lenders that the loan has satisfied the ATR requirements. This is important since a failure to meet the ATR requirements can result in significant liability, including assignee liability, which generally includes up to three years of finance charges, attorney fees and claims that may be brought at foreclosure (commonly known as recoupment) for the life of the mortgage. The implementation of the Rules creates a new template for those involved in residential mortgage lending by creating three new categories of loan underwriting standards with differing risk implications and legal treatments: (1) QM Safe Harbor loans, (2) QM Rebuttable Presumption loans and (3) Non-QM loans. QM Safe Harbor Loans A safe harbor is provided for prime loans meeting the QM requirements. First-lien loans that have an annual percentage rate (APR) that is less than 1.5% above the APOR (and subordinate lien loans with an APR less than 3.5% above the APOR) will qualify as a QM Safe Harbor loan. The legal safe harbor provides a level of assurance that QM Safe Harbor loans meet the ATR requirements when originated, which results in loans that are better insulated from claims and defenses by borrowers. Future litigation risk is mitigated and lenders need only demonstrate that the loan was originated according to QM standards. For example, a borrower could claim that in originating a mortgage the lender did not make a reasonable and good faith determination of the borrower s ability to repay and therefore violated the ATR rule. If a court finds that the loan met the QM requirements and was not higher priced, the borrower would lose this claim. Even if the borrower attempts to show that the DTI was miscalculated and exceeds 43%, therefore violating the ATR standards, as long as the loan is a QM and is not higher priced, the borrower has no recourse. QM Rebuttable Presumption Loans Loans where the APR exceeds the QM Safe Harbor threshold but otherwise meet the QM requirements gain a rebuttable presumption of compliance. These higher-priced QM Rebuttable Presumption loans have less legal protections than QM Safe Harbor loans because such loans give borrowers a greater ability to contest a lender s compliance with the ATR standards. Such loans are eligible for ATR damages and defenses and are subject to higher litigation risk than safe harbor loans as well as additional expenses due to longer liquidation timelines. Even if a borrower cannot demonstrate that a QM Rebuttable Presumption loan did not meet the QM requirements, the borrower can still challenge the loan by proving that the lender did not make a reasonable and good faith determination of the borrower s ability to repay. The borrower must show that based on the information available to the lender at the time the mortgage was originated, the borrower did not have enough residual income left to meet living expenses after paying the mortgage and other debts. Non-QM Loans While Non-QM loans are not required to meet the 43% DTI threshold required of QM loans, they must adhere to the ATR standards as set forth in the Rules. Therefore, when underwriting Non-QM loans, lenders also need to consider the eight specified underwriting factors when determining a borrower s 3 Special Report - Structured Finance: U.S. RMBS

4 ability to repay. Non-QM loans will have the benefit of neither protection that QM Safe Harbor and QM Rebuttable Presumption loans have, which leaves lenders open to greater challenges in the ATR analysis used in qualifying a borrower. As liability risk will be greater than with both QM Safe Harbor and QM Rebuttable Presumption loans, an originator must consider whether it wishes to originate Non-QM loans and, if it does, whether it will be in a position to demonstrate that it made a proper and supportable ATR determination. Given the risk-averse and conservative spirit of the Rules, underwriting standards for Non-QM loans will likely favor prime high net worth borrowers. ATR rules state that in order for a Non-QM loan to satisfy the ability to repay, the lender must use underwriting standards that have historically resulted in comparatively low rates of default during adverse economic conditions and it must be shown that the creditor used underwriting standards based on empirically derived, demonstrably and statistically sound models. In other words, a lender s underwriting standards must be conservative. While DBRS expects that most lenders will be initially reluctant to make Non-QM loans, certain lenders such as large banks catering to the needs of high net worth borrowers have expressed that Non-QM loans are a necessary part of their business strategy and that they will continue originating such loans at current volumes. For example, a large slice of the Non-QM loan market will likely be jumbo prime loans made to such high net worth borrowers, many of whom desire interest-only loans and/or have DTI ratios exceeding 43%. QM Safe Harbor QM Rebuttable Presumption Non-QM Legal Protection Liability Risk and Loss Severity Conclusively Presumed that ATR is Satisfied Borrower Can Rebut the ATR Presumption by Showing Inadequate Residual Income No Legal Protection Lowest Middle Highest DTI/Residual Income 43% 43% No Maximum DTI Requirement Appendix Q Yes Yes No ATR Consideration Eight Underwriting Factors Eight Underwriting Factors Eight Underwriting Factors Must Satisfy Broader ATR Rule Documentation of Sufficient Assets and Income Yes Yes Yes Yes Yes Yes Points and Fees Limit 3% 3% N/A Other Loans Affected In general, loans that have a DTI greater than 43% may be considered QMs as long as they are eligible to be purchased, guaranteed or insured by certain government entities, such as Fannie Mae, Freddie Mac, the Federal Housing Administration and the Department of Veterans Affairs; are made by certain small creditors; or are balloon loans that qualify as being in certain rural or underserved areas. In general, such loans must meet all QM loan standards except for the 43% DTI requirement. 4 Special Report - Structured Finance: U.S. RMBS

5 Discussions with Market Participants Noteworthy Market Comments The following summarizes the most noteworthy points of discussion based on DBRS s conversations with originators, loan aggregators, investment bankers, third-party due diligence providers and legal counsel. Due to the increased legal risks and liabilities associated with QM Rebuttable Presumption and Non-QM loans, many lenders will restrict mortgage originations to QM Safe Harbor Loans, at least initially. Lenders will consider increasing the origination of QM Rebuttable Presumption and Non-QM loans once precedent is established as to how the courts will handle borrower claims and more transparency is established regarding certain subjective components of the Rules. Certain lenders, namely some large banks, have stated that they will not be hesitant to originate QM Rebuttable Presumption and Non-QM loans as they are very comfortable with their origination and servicing capabilities, systems, compliance and residual income calculations. Maintaining documentary evidence of compliance with residual income calculations and DTI ratios will be crucial in order to avoid successful borrower challenges. Certain components of the ATR standards and Appendix Q are vague and open to interpretation, further limiting the origination of Rebuttable Presumption and Non-QM loans. Due diligence firms will have a large role in ensuring compliance with the Rules and in the ratings process. QM Safe Harbor Loans to Rule the Market The risks of not satisfying ATR criteria will likely drive lenders to limit originations, at least initially, to mostly QM Safe Harbor loans. Further, the increased liabilities related to QM Rebuttal Presumption and Non-QM loans, in addition to higher loss severities upon liquidation, will further motivate lenders to focus on QM Safe Harbor loans. As a result of lenders being able to comfortably hold QM Safe Harbor loans in their portfolios or sell such loans via whole loan sales or securitization at competitive pricing (due to lower litigation risk and compliance costs), there will likely be an increase in price competition among lenders, which should benefit prime QM borrowers. For borrowers who do not meet the ATR standards, lenders are expected to greatly reduce originations and may assess higher risk premiums, resulting in decreased credit availability and increased borrowing costs, especially in the high-cost or subprime sector. Further, lenders may initially subject QM Rebuttable Presumption or Non-QM loans to more stringent/conservative underwriting standards than the QM rules actually require, thereby providing a cushion in the event that a borrower challenges compliance with ATR standards. Over time, QM Rebuttable Presumption and Non-QM loan originations will likely increase as court precedents are set and greater certainty around liabilities and damages is established, in addition to lenders gaining more confidence with their underwriting standards and compliance with the Rules. The uncertainty surrounding QM Rebuttable Presumption and Non-QM loans may impair the liquidity and marketability of these loans, thus affecting pricing and valuations. As investors gain more acceptance and lenders more clearly understand the benefits, costs and trade-offs of originating these types of loans, lending should increase. Securitization Outlook The Rules will impact the ability to securitize loans. QM Safe Harbor loans are safer and more homogeneous and thus may be more easily securitized. Securitization is expected to be more difficult for 5 Special Report - Structured Finance: U.S. RMBS

6 QM Rebuttable Presumption and Non-QM loans, as these loans are not homogeneous and may face more legal uncertainties over time. Further, uncertainties related to deal economics based on rating agency treatment, in addition to the premium investors will charge for loans and bonds backed by non-safe harbor loans, has left certain lenders and RMBS issuers unsure of their future borrower universe and securitization volumes. In order to provide a level of comfort to the market, lenders and aggregators have stated that they will generally employ a tighter credit box, in addition to relegating originations to higher-quality prime jumbo borrowers. This will help to ensure that affirmative challenges seeking damages for alleged violations of the ATR rule and defaults are minimal. As well, employing third-party due diligence firms to appropriately scrub the origination standards of the loans will further reassure investors and DBRS. As a result, DBRS expects that the risk of a borrower raising a defense to foreclosure will be minimal within these securitizations. Liability to the securitization trust will mainly be assignee liability through a defense to foreclosure, meaning that the borrower must have defaulted and be in foreclosure. Issuers should anticipate all potential liability and damages that could be imposed, and properly consider if certain expenses, such as legal fees, could be passed through the securitization trust to investors. Other potential costs and timeline carries (such as servicer advances and property maintenance) of an ATR challenge should also be considered but will initially be difficult to anticipate. Rating Considerations DBRS rating considerations with respect to QM and ATR compliance will focus on three primary components: 1. Assessment of originator s controls and procedures. Maintaining documentary evidence of compliance with the ATR and QM standards. Residual income determination as per the standards outlined in Appendix Q 1 to the Rules. 2. Review of third-party due diligence results to verify compliance with the Rules. Proper categorization of QM Safe Harbor, QM Rebuttable Presumption and Non-QM loans. Confirmation of loans meeting the DTI requirements per Appendix Q and points and fees limits. A review of lender s residual income analysis. 3. Evaluation of representations and warranties framework in RMBS securitizations relating to compliance with the Rules. Representations and warranties with respect to the proper categorization of QM Safe Harbor, QM Rebuttable Presumption and Non-QM loans included in the securitization. The loan was originated in compliance with the ATR standards and has a mortgage file that contains all necessary records, evidence and documentation to demonstrate such compliance. The rating considerations are further detailed below. Origination Controls and Procedures Adherence to QM and ATR requirements will be the focal point of DBRS s ratings analysis. As part of the originator review, DBRS will focus on the following as they pertain to compliance with the Rules: 1 In order to satisfy the requirements for a QM, a lender must use the standards in Appendix Q to verify and document a consumer's income and debt and calculate the DTI ratio. 6 Special Report - Structured Finance: U.S. RMBS

7 Quality of internal procedures, processes and controls; Product and underwriting guidelines; Documentation and record retention standards; Enhancements to systems, technology and training; and Quality control. The Rules have raised concerns related to origination practices. Maintaining documentary evidence of compliance with the ATR and QM standards is deemed to be of paramount importance. In order to successfully challenge and confute borrower complaints, originators are expected to focus on accurate loan documentation that proves compliance with the ATR standards. DBRS expects that issuers will be able to capture all the data needed to prove ATR and QM compliance at origination and during the underwriting process, and that data collection, loan application and approval processes have all been updated and are in compliance. All steps and decisions throughout the underwriting process should be evidenced, including all calculations and any judgment calls made by underwriting. Being prepared for the new rules does not appear to be as big of a concern for the large banks as it is for smaller banks, newer lenders and/or aggregators. One large bank stated that it is comfortable complying with the new rules and that the standards are not as impactful as initially feared, as the bank already has existing ability-to-repay standards in place, and that the new requirements are basically an extension of the bank s current processes. Further, most large bank lenders have had robust systems and protocols in place that capture all documents related to borrower assets and income. Therefore, preparing for the Rules is seen as just a build-out and refinement of procedures already implemented. While some lenders have expressed confidence in complying with the Rules, many lenders have recently urged the Bureau to delay January s final implementation. These lenders have stated that software vendors and other compliance specialists that are relied upon are in different stages of product development are only now releasing necessary programs. Many lenders are still awaiting these products and training procedures. Testing of new software and systems, in addition to training employees, will add more time to the process. Additionally, certain originators and aggregators have noted that enforcement of the new processes may present additional concerns since it may involve the originators relationships with origination partners such as brokers or correspondents, or arrangements they may have with other banks, for example, who will fund the loans. Residual Income Determination Market participants have expressed concern with the Rules relating to residual income determination and calculating the borrower DTI ratio as detailed in Appendix Q. Although Appendix Q is very detailed and prescriptive, certain components regarding how to consider and calculate residual income are open to interpretation and may rely on judgment calls by the underwriter. Certain lenders may mitigate these risks by underwriting to a DTI less than 43%, thereby creating a cushion that provides greater certainty that loans are in compliance. Large bank lenders are not expected to lower DTI requirements much below 43%, if at all, as they have already proven compliance with their existing DTI requirements and are more comfortable with their documentation standards than other smaller institutions. Some lenders to whom DBRS has spoken to have incorporated additional quality control procedures and stricter sign-off authority as a way to further mitigate underwriting errors. One concern among market participants is that borrowers may omit certain expenses that, if included, would result in their DTI ratios exceeding the 43% maximum. If a borrower files an ATR claim, lenders are concerned these unrevealed expenses (e.g., medical expenses) might be brought up in a dispute. 7 Special Report - Structured Finance: U.S. RMBS

8 Additionally, lenders have stated that unforeseen expenses that occur after a loan is originated (such as divorce) should not subject the lender to damages based on the ability to repay. Lenders expressed that they will utilize methods to quickly disprove and invalidate a borrower s claim. An executed Borrower Affidavit that confirms the completeness of the provided documentation and attests to the validity and accuracy of the residual income calculation is expected to be the most common method. Lenders have also contemplated recording oral statements, phone calls or other borrower interactions to mitigate risk, although it was noted that such audio recordings may be in violation of certain laws and may actually increase liability down the road. To mitigate liability, lenders have agreed that written scripts must be used while utilizing any recording medium. Additionally, to lower borrower disputes, lenders are making proper borrower education a priority and ensuring that borrowers are more aware of the financial risks before obtaining a mortgage. Third-Party Due Diligence Review When evaluating the quality of a securitization pool, DBRS will assess third-party due diligence results to verify compliance with the Rules and to gauge the quality of an originator s underwriting standards. DBRS will view more favorably an originator or issuer that provides the following: Sufficient evidence that loans are properly categorized as being QM Safe Harbor, QM Rebuttable Presumption or Non-QM; Confirmation that loans meet the DTI requirements per Appendix Q (or qualify for an agency/gse exemption); A review of the lender s residual income analysis; Confirmation that each loan does not exceed the points and fees limits; and Any exceptions. For QM loans, when evaluating adherence to ATR standards, namely DTI calculations and residual income, due diligence firms will likely perform a re-underwriting of loans based on a review of the lender s documentation and determine whether the lender made an appropriate ATR decision in accordance with Appendix Q. For Non-QM loans, which do not provide for a specified DTI ratio but must adhere to ATR standards, due diligence firms will be expected to determine whether documentation is sufficient to meet the eight specified underwriting criteria and that the borrower s ATR was determined pursuant to a lender s guidelines and based upon the maximum payment during the first five years of the loan. Documentation should be able to provide enough data so as to determine the borrower's expenses, income, residual income and DTI. Rather than just confirming that lender documentation is sufficient, or recalculating compliance with ATR standards based on lender guidelines, certain market participants have expressed interest in due diligence firms determining compliance based on their own independent interpretations of the Rules. Generally, DBRS expects points and fees to be re-calculated by the diligence firms. Initially, DBRS expects that loan level due diligence will be performed on 100% of a mortgage pool, including loans deemed QM Safe Harbor. Over time, as the originators demonstrate the ability to comply with the QM and ATR requirements, DBRS may accept lower sample sizes in a securitization. As stated, DBRS will consider the accuracy of a loan s QM designation in addition to the quality of a lender s compliance with the Rules. Due diligence firms are expected to provide an attestation for each transaction covering the review performed. Diligence firms may also be looked upon to review any recordings with the borrower. 8 Special Report - Structured Finance: U.S. RMBS

9 RMBS issuers will be expected to provide satisfactory representations and warranties related to Representations and Warranties Framework compliance with a loan s QM designation which would be subject to repurchase obligations. DBRS expects representations and warranties to state the proper categorization of QM Safe Harbor, QM Rebuttable Presumption and Non-QM loans included in the securitization, and that the loan was originated in compliance with the ATR standards and has a mortgage file that contains all necessary records, evidence and documentation to demonstrate such compliance. DBRS will also review the enforcement mechanisms and remedies for curing any breaches, coupled with an evaluation of the financial condition of the party providing the representations and warranties. What DBRS Expects RMBS pool review encompasses default and loss severity analysis. Under the Rules, default probability will already have been assessed based on the characteristics of each loan (e.g., higher DTI ratios and interest-only loans generally result in increased default assumptions). As such, DBRS does not anticipate assigning additional penalties to default probability as a result of the Rules. However, DBRS expects that the Rules may have an impact on its loss severity analysis as a result of potential increased litigation risk or delays in the liquidation process. The QM Safe Harbor loans are deemed to meet the QM and ATR requirements and are therefore better protected from future claims and defenses. As a result, DBRS does not anticipate that QM Safe Harbor loans will warrant additional loss severity adjustments in its rating analysis. The higher priced QM Rebuttable Presumption loans give borrowers a greater ability to contest a lender s compliance with the ATR standards, and therefore contain greater liability risk, although DBRS believes the actual litigation occurrence on QM Rebuttable Presumption loans will be limited. While Non-QM loans are also required to adhere to the ATR standards as set forth in the Rules, such loans have no liability protection from the Rules, which leaves lenders open to greater challenges in the ATR analysis used in qualifying a borrower. DBRS anticipates that the QM Rebuttable Presumption and Non-QM loans may warrant additional rating adjustments that affect loss severity and, as such, loss expectation in its rating analysis. Nonetheless, such increased risk and the resulting rating adjustment to the QM Rebuttable Presumption and Non-QM loans may be mitigated by a satisfactory originator and third-party due diligence review that focuses on the aspects DBRS outlined in this report, as well as a strong representations and warranties framework. 9 Special Report - Structured Finance: U.S. RMBS

10 Note: All figures are in U.S. dollars unless otherwise noted. This report is based on information as of November 2013, unless otherwise noted. Subsequent information may result in material changes to the rating assigned herein and/or the contents of this report. Copyright 2013, DBRS Limited, DBRS, Inc. and DBRS Ratings Limited (collectively, DBRS). All rights reserved. The information upon which DBRS ratings and reports are based is obtained by DBRS from sources DBRS believes to be accurate and reliable. DBRS does not audit the information it receives in connection with the rating process, and it does not and cannot independently verify that information in every instance. The extent of any factual investigation or independent verification depends on facts and circumstances. DBRS ratings, reports and any other information provided by DBRS are provided as is and without representation or warranty of any kind. DBRS hereby disclaims any representation or warranty, express or implied, as to the accuracy, timeliness, completeness, merchantability, fitness for any particular purpose or noninfringement of any of such information. In no event shall DBRS or its directors, officers, employees, independent contractors, agents and representatives (collectively, DBRS Representatives) be liable (1) for any inaccuracy, delay, loss of data, interruption in service, error or omission or for any damages resulting therefrom, or (2) for any direct, indirect, incidental, special, compensatory or consequential damages arising from any use of ratings and rating reports or arising from any error (negligent or otherwise) or other circumstance or contingency within or outside the control of DBRS or any DBRS Representative, in connection with or related to obtaining, collecting, compiling, analyzing, interpreting, communicating, publishing or delivering any such information. Ratings and other opinions issued by DBRS are, and must be construed solely as, statements of opinion and not statements of fact as to credit worthiness or recommendations to purchase, sell or hold any securities. A report providing a DBRS rating is neither a prospectus nor a substitute for the information assembled, verified and presented to investors by the issuer and its agents in connection with the sale of the securities. DBRS receives compensation for its rating activities from issuers, insurers, guarantors and/or underwriters of debt securities for assigning ratings and from subscribers to its website. DBRS is not responsible for the content or operation of third party websites accessed through hypertext or other computer links and DBRS shall have no liability to any person or entity for the use of such third party websites. This publication may not be reproduced, retransmitted or distributed in any form without the prior written consent of DBRS. ALL DBRS RATINGS ARE SUBJECT TO DISCLAIMERS AND CERTAIN LIMITATIONS. PLEASE READ THESE DISCLAIMERS AND LIMITATIONS AT ADDITIONAL INFORMATION REGARDING DBRS RATINGS, INCLUDING DEFINITIONS, POLICIES AND METHODOLOGIES, ARE AVAILABLE ON 10 Special Report - Structured Finance: U.S. RMBS