In light of the recently solidified criteria for Qualified Mortgages (QM), Moody’s Investors Service has come out with a proposed methodology for mortgage-backed securities.

Under the approach, released today, the highest enhancement levels for a deal to be rated  investment-grade will be applied to deals backed by riskier, non-QM deals. The next highest investment-grade hurdle will face what is known as QM Rebuttable Presumption loans.

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