New Residential Mortgage Loan Trust, 2025-NQM5 is preparing to issue about $500.9 million in residential mortgage-backed securities (RMBS), bringing more capital into the market for investor-owned properties.
Rithm Capital, a real estate investment trust that also invests in mortgage loan aggregation, is sponsoring the deal. This is also the program's fifth securitization this year backed by a pool of first-lien mortgages extended to prime and non-prime borrowers.
October 15 is the closing date for the deal, which will sell notes through about nine tranches of class A, mezzanine and B notes, according to S&P Global Ratings. The senior notes will repay investors on a pro rata basis, while the mezzanine and subordinate notes will be repaid sequentially, according to the rating agency.
S&P also says that the outstanding debt is slated to mature on Aug. 25, 2065. The notes benefit from credit enhancement through notes that are lower in payment priority and excess spread that supports subordination.
The collateral pool is composed of 467 fixed-rate loans, which finance a range of homes, including single-family, planned-unit developments, two- to four-family residences and condominiums, according to S&P. The rating agency says property focused investor loans represent 32.60% of the collateral pool, and they were underwritten based on a debt service coverage ratio.
On a weighted average (WA) basis, the collateral has a non-zero DSCR is 1.14. The loans have an original cumulative loan-to-value ratio of 74.2%, and a FICO score of 743, both on a WA basis.
Most of the properties, 75.6%, are single-family dwellings, including townhouses and planned-unit developments. A little over half the mortgage proceeds, 57.5%, funded purchases, and 32.7% are for cash-out refinancings, the rating agency said.
Alternative documentation, including bank statements and DSCR, accounts for a majority, 77.78%, of the underwriting methods.
S&P assigns AAA to the three A1 tranches; AA- to the A2 notes; A- to the A3 notes; BBB- to the M1 notes; BB- to the B1 notes and B- to the B2 notes, the rating agency said.
