The credit quality of some of the private-label RMBS deals in the works is not as high as that of recent deals by Redwood Trust, according to Fitch Ratings.

Fitch warned Wednesday that recent “rep and warranty” proposals in new U.S. RMBS deals may expose investors to added risks from “weak” underwriting and “defective” mortgages. The ratings agency believes that these weaker proposals need to be accounted for in the credit enhancement, where possible.

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