Financial Institutions: U.S. Residential Mortgage Company Rating Methodology

Executive Summary

This document describes KBRA’s rating methodology when assigning issuer, senior debt, and other obligation ratings to U.S. non-bank residential mortgage companies and any associated holding companies. The methodology was developed with the goal of producing and maintaining credit ratings that perform in accordance with KBRA’s published rating definitions. For information on KBRA’s rating scales, please see KBRA’s Rating Scales and Definitions.

U.S. Residential Mortgage Company Industry Overview

KBRA views the residential mortgage sector as among the more dynamic within the broader financial services industry, owing to its sheer scale and complexity. The competitive landscape in mortgage finance is extensive, encompassing numerous governmental entities, insured banks, and non-bank finance companies, including real estate investment trusts and partnerships. The efficiency of the residential loan…