More than four hundred first-lien reverse mortgages will secure a pool of $275.8 million in securitized bonds, coming to market from sponsor MOST Mortgage
The transaction, MOO Securitization Trust, series 2026-RM3, has a slated closing date of October 6. The transaction will sell the notes through four tranches—an A1 tranche and three class M notes—according to Morningstar DBRS.
The deal will repay investors through a senior-subordinate structure, with a stated final maturity date of October 2026, the rating agency said, and a note rate with a ceiling of 4.87%.
The deal has two initial purchasers, Performance Trust Capital Partners and Guggenheim Securities. The latter also was a manager on two previous transactions, series 2026-RM1 and 2026-RM2, the rating agency said.
The senior, class A1 notes, will issue the bulk of notes, with $235.3 million, DBRS said.
Mutual of Omaha Mortgage originated a pool with mostly adjustable rate mortgages, which account for 66.25% of the pool's aggregate unpaid principal balance (UPB), the rating agency said. The adjustable rate loans have a weighted average (WA) mortgage interest rate of 10.02%.
Fixed-rate loans account for 33.75% of the pool's UPB, with a WA interest rate of 8.91%, the rating agency said.
Typically offered to borrowers aged 62 years and older, reverse mortgages allow consumers to extract equity from their homes, either through a lump sum or a stream of payments.
Borrowers do not have to repay any principal or interest until a maturity event occurs. Maturity events include the death of a borrower, the sale of the mortgaged property or if the borrower no longer occupies the related residence for a period such as a year.
California accounts for the collateral pool's highest concentration of the related properties in the pool, with 50.38%, followed by Florida and Arizona, with 9.07% and 4.43%, respectively.
DBRS ratings include (P) AAA (sf) on the class A1 notes; ratings on the M1 through M3 notes range from (P) AA (low) (sf) to (P) BBB (low) (sf) on the M3 notes, DBRS said.
