Fitch Ratings finalized criteria for analyzing qualified mortgages for securitization.

This also included loans originated after January 10, when the rules came into effect, which also meet ability-to-repay standards.

The criteria help lay the groundwork for the eventual issuance of these residential-mortgage backed securities.

The released criteria offer insight into the standards necessary to achieve the much-desired triple-A rating.

The assumptions reflect a low probability/high severity scenario.

"We expect some defaulted borrowers will likely challenge the Rule," said Senior Director Suzanne Mistretta, "but a lack of legal precedent could make the first few cases high profile and prone to significant legal costs."

Cost related to the above will be include in any forthcoming Fitch analysis of said deals, the credit ratings agency noted.

Fitch will make upward adjustments to its credit enhancement calculations if the originator designates the loan as higher-priced QM or non-QM, said Fitch in a statement.

Loans identified by the lender and confirmed by third party due diligence as safe harbor QM will not receive an adjustment.

Where trust expenses are paid from available funds, additional subordination will be expected.