KBRA releases a report examining the current volatile operating environment for mortgage originators—including from rising interest rates, persistent inflation, and record-high home prices—as well as the potential implications for RMBS performance.

The report discusses how the RMBS market may be impacted by factors such as lender liquidity and financial viability, and what impact post-crisis RMBS enhancements could have on expected outcomes. KBRA concludes that despite risks in the current operating environment, securitizations are generally isolated from a given originator’s financial and capital markets-related troubles insofar as the loan manufacturing process itself is not implicated as substandard. In fact, we generally do not expect that originations over the past two years will have material loan manufacturing issues, even from entities with financial or liquidity hardships.

Click here to view the report.

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About KBRA

KBRA is a full-service credit rating agency registered in the U.S., the EU and the UK, and is designated to provide structured finance ratings in Canada. KBRA’s ratings can be used by investors for regulatory capital purposes in multiple jurisdictions.

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