The real estate investment trust is readying its 12th deal this year under the Sequoia label, according to a presale report from Kroll Bond Ratings.
The collateral behind this $325 million transaction consists of 410 first-lien, 30-year, fixed-rate jumbo mortgages.
The deal is split into several tranches with different ratings. The senior-most piece amounts to about $298 million and has a credit enhancement level of more than 8%. Kroll expects to rate that tranche AAA(sf). The more than $3 million B-4 tranche is the lowest rated. It has a grade of BB(sf) and a credit enhancement level of just over 1%.
The borrowers in the pool on average have substantial equity in their homes, as reflected by a weighted average loan-to-value ratio of 70%, according to Kroll. The weighted average FICO score is at 766.
There are number of originators behind the collateralized loans and some of these do not have a long track record originating jumbo mortgages, as with previous Sequoia deals.
“Some of the sellers may lack sufficient financial resources to fulfill their repurchase obligations if there was a breach of a loan representation and warranty,” Kroll said in its release.
Forty percent of the underlying loan pool is secured by homes in California. This is in line with many RMBS in the post-crisis era. Texas comes in second with an almost 8% share.
Cenlar FSB will service nearly 82% of the loans. CitiMortgage is the transaction’s master servicer.