FirstKey Mortgage is marketing its fifth portfolio consisting primarily of formerly troubled first-lien residential mortgages that have rebounded to reperforming status.

The 2,517 loans in the Towd Point Mortgage Trust 2016-5 pool include a 77.8% share of well-seasoned, modified loans. The loans in the pool have a principal balance of $550.7 million, and will secure nine classes of A and B notes totaling $550.2 million.

Bond rating agency DBRS has assigned provisional AAA structured finance ratings to the $354.4 million Class A-1 notes atop the capital stack. Those bonds carry a 35.6% credit enhancement.

DBRS also rates the Class A-2 senior notes totaling $35.8 million, with an AA rating and a 29.1% credit enhancement level.

The modifications for 93.5% of the loans in the modified loan pool took place more than two years ago, amid a pool of loans (with an average balance of $218,624) that have a weighted average seasoning of 115 months. About 69% of the loans have had no delinquency for the past 24 months, providing the pool a higher credit quality compared to other reperforming loan securitizations.

The $550.2 million outstanding pool balance is the smallest of any Towd Point securitization in 2016.

DBRS states 87% of the loans, carrying a weighted average coupon of 4.14% and a borrower FICO average score of 676, have been current for the past year, and over 33% have been current for three years.

Only 7.6% of the loans are interest only, and only 0.8% of the pool (involving 18 loans) involved prior bankruptcies.

The loans are serviced by Credit Suisse affiliate Select Portfolio Servicing.

The deal is expected to close Dec. 9.

 

Subscribe Now

Authoritative analysis and perspective for every segment of the mortgage industry

30-Day Free Trial

Authoritative analysis and perspective for every segment of the mortgage industry