Last week Moody's Investors Service announced it would reassess its ratings on transactions it deems to have, "trustee risk," or risk associated with a trustee whose understanding of its role and responsibilities is different than Moody's understanding.

In the past two years, subjective factors have crept into the credit analysis of ABS, such as "intention risk," "willingness-to-cheat-risk," "integrity risk," and other non-quantifiable aspects generally associated with the seller/servicer. While non-quantifiable, these risks could still possibly be structured out of the picture by adding certain watch guards to the documentation, some of which Moody's had assumed were already there implicitly.

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