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41 » VISIT US ONLINE @ DSNEWS.COM SINGLE-FAMILY RENTAL TRANSACTIONS EXPERIENCE LOW DELINQUENCIES, IMPROVED VACANCIES Delinquencies remained low among 15 single- family rental securitizations for March, according to data reported by Morningstar Credit Ratings in a recent report entitled "Single-Family Research: Performance Summary Covering All Morningstar Rated Securitizations." Delinquencies were reported at less than 1 percent in 11 out of 15 single-family securitizations rated by Morningstar in March. In general, the number of tenants with delinquent payments also continued to decline. e highest percentage of tenants with delinquent payments for any one securitization in March was 1.9 percent for an American Residential Properties securitization, ARP 2014-SFR1, according to Morningstar. However, the vacancy rate for ARP 2014-SFR1 improved month-over-month, falling from 10 percent in February down to 8.3 percent in March. "Morningstar had anticipated elevated levels of vacancy since at cutoff, lease expirations were scheduled to peak through February 2015 with 56.3 percent of the portfolio due to expire through this time period," Morningstar said in the report. "With fewer lease expirations for ARP 2014- SFR1 in the coming months, it is expected that this metric may continue to improve." e monthly retention rates for the 15 Morningstar-rated securitizations generally were reported to be in the mid-70s to low-80s, with two exceptions—two Progress Residential transactions, PRD 2014-SFR1 and PRD2015- SFR1, which posted monthly retention rates of 70.6 percent and 68.6 percent, respectively, in February, according to Morningstar. March's report found lease expirations were rising across multiple transactions, which could lead to a future rise in vacancies, according to Morningstar, although sufficient cash flows among the transactions meant the bond obligations were met for the 15 single-family rental securitizations. MORGAN STANLEY SAYS IT MIGHT SETTLE MBS SUIT WITH DEUTSCHE BANK FOR $292 MILLION Morgan Stanley reported in its quarterly filing it might take a $292 million loss as a result of a potential settlement with Deutsche Bank over the misrepresentation of mortgage-backed securities. Deutsche Bank sued Morgan Stanley in April 2014, claiming the New York-based investment firm breached a contract by misrepresenting the quality of about $735 million worth of loans held in a trust in in which Deutsche Bank was the trustee and Morgan Stanley was the sponsor. In April, a judge in the Southern District of New York denied Morgan Stanley's motion to have the bank's complaint dismissed. e announcement of a possible settlement with Deutsche Bank is the latest in a series of ongoing legal troubles Morgan Stanley experienced with regards to its handling of mortgage-backed securities in the run-up to the financial crisis. In late April, reports surfaced that the investment firm was in talks with the office of New York Attorney General Eric Schneiderman over a possible $500 million settlement to resolve claims Morgan Stanley omitted certain material information on 30 subprime loans sold to investors, calling into question Morgan Stanley's due diligence, underwriting, and valuation processes. Morgan Stanley settled with the Justice Department in late February 2015 to pay $2.6 billion to resolve similar claims, and in February 2014, the firm settled with the FHFA for $1.25 billion to resolve claims it sold faulty mortgage- backed securities to Fannie Mae and Freddie Mac before the crisis. Also, in mid-February 2015, Morgan Stanley made a motion in the New York Supreme Court to have two FHFA lawsuits that accused the firm of failing to buy back $2.5 billion worth of faulty securities dismissed.

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