04.12.2013 21:46:00

Moody's: Non-qualified mortgages will increase risk in new RMBS

New York, December 04, 2013 -- US residential mortgage-backed securities (RMBS) backed by non-qualified mortgages will incur higher loss severities on defaulted loans than those backed by qualified mortgages (QM), according to a new report by Moody's Investors Service. The key driver of the loss severities will be the higher legal costs and penalties for non-QM securitizations, says Moody's in the report, "Non-QM US RMBS Face Higher Risk of Losses Than QM, but Impact on Transactions Will Vary."

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