The Mortgage Bankers Association (MBA) filed a comment letter on June 9 with Standard & Poor's (S&P), New York, expressing concerns over a proposal that would result in a "dramatic change of direction" in how the ratings agency assesses risks of rated instruments. S&P issued a request for comment (RFC) on May 26 titled U.S. CMBS Rating Methodology and Assumptions for Conduit/Fusion Pools. The proposal suggests that the appropriate methodology for rating commercial mortgage-backed securities (CMBS) should be based on an aggregation of loan-level assumptions of losses. Loans would be individually assessed based on their level of protection from the impacts of market downturns. It also suggests that stressed losses on individual loans would be modeled and then aggregated up to the bond level.
