Suzanne Mistretta, senior director in Fitch’s RMBS groupand Rachel Brach, a director in the RMBS group, said about two-thirds of the pool consists of “super-prime” credit jumbo collateral similar to that seen in other transactions, when asked how it compares to other jumbo RMBS deals seen recently.
But also about one-quarter contains more traditional prime jumbo credit loans. Around 5% consists of loans with strict credit guidelines made to foreign nationals, “many of which do not have traditional U.S. credit histories,” and another 2% consists of loans to investors financing up to 20 properties.
“This deal has a little bit more of a broader spectrum of borrowers,” Mistretta said.
The transaction has what Brach called a “very robust” representation and warranty framework and the presale report notes that the seller, depositor or affiliate will at least initially retain at least two classes. The main issuer in the market has done these things, but some others have not.
However the originating affiliate, New Penn, is considered a relatively weaker rep and warrant provider than some others in that it does not meet Fitch’s financial condition threshold, which Mistretta described as receiving an “investment grade” evaluation by Fitch financial institutions group.
She said when it comes to the securitization platform there are still “some operational weaknesses that probably will be remedied over time” as it gets past the start-up stage and develops more of a track record.
Brach also noted that the geographic concentration in California and three of its metropolitan areas is such that default expectations are “a little on the high side” compared to other transactions.
