Shellpoint Partners is preparing its first private-label mortgage securitization in over a year, according to Kroll Bond Rating Agency.

It's also the first private-label U.S. deal by anyone in almost two months.

The $353.6 million Shellpoint Co-Originator Trust 2016-1 is backed by prime jumbo loans to borrowers with strong credit profiles and significant equity in their homes. However, the collateral includes a much smaller percentage of loans originated by Shellpoint's New Penn Financial subsidiary, just 0.8%, compared with just over half, or 52.1%, for the 2015-1 deal, completed in August of last year.

Instead, the bulk of the collateral, 96.3%, was acquired in a bulk acquisition from Bank of America, which in turn acquired the loans from various mortgage loan originators or sellers including JMAC Lending, PrimeLending, Caliber Homes, Quicken Loans and DiTech Financial.

Borrowers in the mortgage pool possess a weighted average original credit score of 760 and a weighted average original loan-to-value ratio of 68.5%. This low leverage provides mortgage bond investors with a margin of safety against potential home price declines, according to KBRA.

The weighted average age of the loan is approximately 5.3 months; all loans are current as of the cut-off date and nearly all borrowers have been current since origination, with six loans (1.2%) experiencing one-time 30-day delinquencies likely due to servicing transfers. A single loan representing 0.2% of the collateral did have a 30-day delinquency within 11 months from its origination that was not attributed to a servicing transfer.

The vast majority of loans, 99.1%, are fully amortizing, fixed-rate mortgages with either 30-year (83.4%) or 15-year (15.7%) terms. Approximately 0.9% of the loans are hybrid adjustable-rate mortgages with rates that are fixed for initial terms of five, seven or 10 years and then reset periodically.

Merrill Lynch, Pierce, Fenner & Smith Inc. is the lead underwriter and initial purchaser.

Banks and other investors have generally found it more attractive to hold loans on their balance sheet, rather than securitize them. Prior to this deal, the most recent deal, from JPMorgan, was launched in September.

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