On November 24, Moody’s Investors Service updated its rating criteria for evaluating representations and warranties, including a minimum set of representations and warranties that an RMBS transaction must include in order for Moody’s to rate the transaction. Moody’s also released a report describing its criteria for evaluating independent third-party loan level reviews for RMBS before and after securitization, and a report describing Moody’s enhanced approach to originator assessments for RMBS.  RMBS Rating Criteria.  Third-Party Loan Level Review Criteria.  Enhanced Approach to Originator Assessments.

 

On December 3, the SEC voted to reduce conflicts of interest at rating agencies by, among other things, barring discussions about compensation between those who evaluate ratings and those seeking a credit rating, and also by restricting analysts from advising as to how securities should be structured to achieve certain ratings.  SEC Release.