American International Group Inc. is entering the private-label residential mortgage-backed securities market through a new Credit Suisse transaction, according to Fitch Ratings' presale report on the deal.
The nearly $512 million in loans backing the transaction, Credit Suisse Mortgage Capital 2017-HL1 Trust, came from AIG subsidiaries.
The collateral's weighted average credit score, at 779, is higher than in any other transaction rated by Fitch post-crisis, according to the ratings agency.
However, most of the collateral pool received a B rating or lower in third-party reviews due to minor compliance errors related to disclosures.
The mortgages were originated 15 months ago, less than a year after integrated disclosures became required under the Truth in Lending Act and Real Estate Settlement Procedures Act.
AMC Diligence examined selected loan files and conducted reviews of those files' compliance credit and valuations. Another third-party provider, Clayton, conducted more standard due diligence reviews on all the loans in the pool.
Several different lenders originated the loans, all of which meet the criteria for the qualified mortgage safe harbor from liability under the ability to repay rule.
The largest originators are Finance of America Mortgage (9% of the loan pool), Stearns Lending (6.4%), American Pacific Mortgage Corp. (5.3%) and Cornerstone Home Lending Inc. (5.2%). No other originator represents more than 5% of the loan pool.
As is the case with most jumbo, private-label residential mortgage-backed securities transactions, more than one-third of the loans in the transaction are concentrated in California.
Cenlar and Wells Fargo Bank will collectively serve as the master servicer for the transaction.
AIG had indicated earlier it was considering securitization as a possible alternative for its loans.