Reposted from 5.6.19 DBRS commentary:

“…Some market participants have equated them to pre-crisis Alt-A or subprime mortgages. However, DBRS deems the credit quality of non-QM securitizations issued to date to be considerably improved from pre-crisis standards (ATR rules, tighter underwriting and independent appraisal process, and robust loan attributes) … the weighted-average (WA) FICO rarely dips below 690 and the WA LTV generally fluctuates between 75% and 80%, which contrasts with the pre-crisis 620 (WA FICO) and 90% (WA LTV) representative pool… Pre-crisis, incentives had often been misaligned, so there may have been coercion imparted on appraisers to inflate property values during the underwriting process. These days, third-party review firms order independent appraisals, many of which are further validated by second valuation products to confirm accuracy, especially for loans to be included in a securitization…”

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